The USDA’s Foreign Agricultural Service predicted in a report that Brazilian cattle slaughter will decline next year because of a forecasted start of the reversion of the cattle cycle.
Producers there likely will start retaining cattle in 2025, driving calf prices upwards, the FAS said.
Also, record beef exports were forecast for 2024 and 2025, the USDA report said. In 2025, domestic consumption was forecast to decrease, as producers will prioritize exports, taking advantage of strong external demand, devalued local currency and challenges faced by foreign competitors.
The Brazilian swine industry was forecast to have increases in production and slaughter in 2024 and 2025, the report said. As a result, the FAS forecast pork production, domestic consumption and exports to increase in 2024 and 2025.
BRAZIL 3RD LARGEST CATTLE PRODUCER
Brazil is the third largest cattle producer in the world, the FAS report said. Yet, like the US, the national herd has been in cyclical decline.
FAS economists there projected a 2025 calf crop of 47.8 million head, a 1% increase from the 47.5 million the FAS estimated for this year.
Additionally, the Brazilian FAS office forecast a 1% decrease in slaughter next year following increased slaughter this year.
Producers there were expected to start retaining cattle next year, a move that will keep cattle out of the slaughter lineup, decrease beef production and support prices.
The FAS office there said Brazil stopped vaccinating against Foot and Mouth disease this year and will start the process of getting World Organization for Animal Health recognition as being free from FMD without vaccination this month.
Brazil’s live cattle exports were forecast at 515,000 head in 2025 because of cattle retention. Live cattle exports this year were estimated at 525,000 head, affected by Turkey’s decision to impose an import quota on feeder cattle.
BRAZIL 2ND LARGEST BEEF PRODUCER
The FAS report said Brazil was the second largest beef producer and the largest beef exporter in the world, accounting for 25 of all beef exports globally.
Brazil’s FAS office forecast a 1% decrease in 2025 beef exports at about 11.81 million tonnes following an 8% increase in 20224, a year marked by increased slaughter.
The FAS office forecast a 1% decrease in beef consumption in 2025, reaching 8.2 million tonnes, consistent with the start of the bounce in the cattle cycle.
The FAS report said it had predicted record beef exports for 2024 and then in 2025, reaching 3.6 million tonnes, considering beef production, strong external demand, a devalued Real and foreign competitors facing challenges.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $183.00 per cwt to $186.22, compared with last week’s range of $185.00 to $196.79 per cwt. FOB dressed steers, and heifers went for $289.28 per cwt to $296.44, compared with $292.43 to $300.38.
The USDA choice cutout Wednesday was down $4.68 per cwt at $307.29 while select was down $2.62 at $297.63. The choice/select spread narrowed to $9.66 from $11.72 with 105 loads of fabricated product and 19 loads of trimmings and grinds sold into the spot market.
The weighted average USDA listed wholesale price for fresh 90% lean beef was $376.70 per cwt, and 50% beef was $123.28.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.48 to $1.58 a bushel over the Sep corn contract, which settled at $3.65 1/4 a bushel, down $0.02.
No live cattle contracts were tendered for delivery Wednesday.
The CME Feeder Cattle Index for the seven days ended Tuesday was $242.64 per cwt, up $0.01. This compares with Wednesday’s Aug contract settlement of $243.55, down $0.65, and the Sep settlement of $241.30, down $0.62.