Inthe
mirror
I
n 2016, the Brazilian economic crisis im-
pacted negatively on demand for beef
in the domestic market, giving rise to a
scenario that made the Country’s stocks
go up. Under recession and with unem-
ployment on the rise, the pressure upon
beef, with people partially shifting to chick-
en and pork cuts, got tighter. The year was
atypical in terms of fat cattle arroba prices,
dropping considerably in the second half of
the year, a phenomenon that had only hap-
pened in 2005, year inwhich an outbreak of
the foot-and-mouthdiseasewasdetected in
Mato Grosso do Sul, and in the global food
crisis in 2008.
According to the Association of Brazilian
Crisis hadan influence
on the domesticmarket
in that demand for beef
went down in 2016, but
lowsupplies prevented
further devaluation
Beef Exporters (Abiec), the industries had
difficulty in selling their production, reflect-
ing theeconomicenvironment. This exerted
pressure on the price of cattle on the hoof.
On the other hand, the smaller supply of fin-
ished animals put limits to an evenmore se-
rious devaluation of the arroba, by year’s
end. Off-season time coincided with con-
finements on the decline, resulting into sta-
ble prices per arroba.
According to Abiec officials, the nomi-
nal values of fat cattle, deflated to real val-
ues,showtheimpactstemmingfromtheac-
cumulated inflation upon the prices, as the
years go by. Based on the General Price In-
dex–DomesticAvailability(IGP-DI),released
by theGetulioVargas Foundation ( FGV), ina
comparisonbetween2015and2016, theav-
erage price of fat cattle dropped 4.5%. The
price of fat cattle achieved its highest value
onrecordin2015,whenitreachedR$167.67
per arroba. Inflation could induce the illu-
sion that prices in previous years were low-
er than the ones practiced in 2016. Howev-
er, if we remove inflation, it is perceived that
in previous years the value was even higher
than throughout 2016.
At the end of the year, prices recovered
slightly, because of tight supply stemming
from the drought conditions in Central Bra-
zil, which curbed the recovery of the pas-
turelands and the attempts to make the
animals put on weight in the major cattle
producing regions. With a smaller crop and
stocks on the decline, corn prices jumped
in the domesticmarket, leading cattle farm-
ing to re-evaluate their nutrition strategies.
Compared to 2015, corn prices soared 67%.
This increase, the cost of lean cattle and
calves, and the low value per arroba of fat
cattle reduced confinements by 18%, ac-
cording to a report by the National Associa-
tion of Confiners (Assocon).
This scenario had reflections on the
price of calves, which, after soaring in 2014
and 2015, started to lose price in the spring.
The rising offer of repositionanimals, gener-
ated by the parent breeds retained in 2014,
helped with giving rise to a period of retrac-
tion, whilst indicating the turn of the cattle
farming cycle, driven by the retention of the
females in 2015, which lent support to the
domestic prices andwhat adjusted themar-
ket were exports, which soared in value.
31
a gangorra
ups and downs
Comportamentodos preços
conforme o Indicador
doBoi Gordo Esalq/BM&FBovespa
Fonte:
Cepea/Esalq/USP, agosto de 2017.
2016 a 2017 (ago/ago)
Preço à vista/@
Data
R$
US$
04/01/2016
149,34 36,89
01/02/2016
152,97 38,53
01/03/2016
155,44 39,41
01/04/2016
157,99 44,27
02/05/2016
154,07 44,13
01/06/2016
156,43 43,54
01/07/2016
156,16 48,33
01/08/2016
152,52 46,61
01/09/2016
148,46 45,71
03/10/2016
152,76 47,74
01/11/2016
150,03 46,30
01/12/2016
149,43 43,05
02/01/2017
148,93 45,34
01/02/2017
145,77 46,29
01/03/2017
144,19 46,60
03/04/2017
134,85 43,33
02/05/2017
137,45 43,58
01/06/2017
131,57 40,51
03/07/2017
126,37 38,30
01/08/2017
127,05 40,69
22/08/2017
135,94 42,92
