The USDA’s Foreign Agricultural Service in Brasilia, Brazil, said in an annual report Wednesday that Brazil, the second largest beef producing country and the largest beef exporting country in the world, was expected to decrease slaughter in 2026.
By then, rebuilding the cattle herd will be under way, having begun in the second half of 2025, the report said. Producers were thought likely to begin holding cattle from the market, driving calf prices upward.
Record beef exports were forecast for 2026, the FAS report said. Domestic consumption was forecast to decrease, as producers likely would prioritize exports, driven by strong external demand, devalued local currency and challenges from foreign competitors.
The swine industry was expected to increase production and slaughter in 2026, the FAS said. As a result, the Brasilia FAS office forecasted increased pork production, stable domestic consumption and record exports in 2026.
BRAZIL TO BEGIN HERD REBUILD
The 2026 calf crop was forecast to reach 49.6 million head, a 5% increase from 2025, the FAS said. The Brasilia office forecast the cattle herd at 181.2 million in 2026, virtually unchanged because of the beginning of the cattle cycle rebuild, which was estimated to start in the second half of this year.
Brazil has been at the bottom of the cattle cycle since 2023, the FAS said. Producers signaled the inversion of the cattle cycle by retaining inventories.
Sluggish economic performance was expected in 2025 and 2026, the FAS said. The Brazilian Central Bank forecasted GDP to grow 1.9% in 2026, following a 2.2% growth in 2025.
The Central Bank Focus survey published on Aug. 22 anticipated inflation at 4.3% in 2026 and 4.9% in 2025, the FAS report said. The exchange rate from Brazilian reais to US dollars was forecast at R5.64 to $1.00 in 2026 and R5.59 to $1.00 in 2025. The real has continued to lose value, affecting production and exports.
PORK PRODUCTION BOOST PREDICTED
Per official USDA data, Brazil is the fifth largest swine producer in the world. The FAS forecasted that in 2026 production will increase 1% to 49.05 million head, following an estimated 2% increase in 2025.
The forecast was based on expected strong external demand, positive domestic demand, increased availability of feed from record corn and soybeans crops and devalued domestic currency – making Brazilian pork cheaper for international markets.
Brazilian swine producers experienced historically high profit margins in 2025, and the expectation was for a profitable 2026, the report said. The Brazilian pork industry has increased domestic production driven by lower production costs and increased external demand.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $242.51 per cwt to $245.69, compared with last week’s range of $242.00 to $246.00 per cwt. FOB dressed steers and heifers went for $381.53 per cwt to $383.82, compared with $379.65 to $387.65.
The USDA choice cutout Wednesday was down $2.03 per cwt at $405.64 while select was off $3.28 at $383.68. The choice/select spread narrowed to $21.96 from $24.35 with 123 loads of fabricated product and 13 loads of trimmings and grinds sold into the spot market.
The USDA-listed the weighted average wholesale price for fresh 90% lean beef was $434.01 per cwt, and 50% beef was $157.67.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.05 to $1.20 a bushel over the Dec corn contract, which settled at $4.17, down $0.02 3/4.
The CME Feeder Cattle Index for the seven days ended Tuesday was $365.47 per cwt, down $0.39. This compares with Wednesday’s Sep contract settlement of $353.20, up $1.50.