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Big Year for Brazilian, Paraguayan Beef Exports; Uruguay Slightly Lower

Brazil's Beef & Variety Meat Exports in Metric Tons from January 2010 through December 2013

Brazil’s 2013 beef and beef variety meat exports totaled 1.4 million mt, up 22 percent from the previous year but still 10 percent below their 2007 peak. Export value set a new record of $6.34 billion, up 17 percent from 2012 and 46 percent above 2007. Herd rebuilding has taken place in Brazil since 2007, leading to an increase in current production. A weaker currency also helped fuel 2013 exports.

Brazil’s Export growth was led by Hong Kong (309,120 mt, +83 percent), Russia (303,741 mt, +20 percent) and Venezuela (156,960 mt, +80 percent), but exports were also higher to Egypt (143,801 mt, +4 percent), and the EU (118,777 mt, +10 percent). Brazil’s exports to the EU were still 70 percent below the peak year of 2006, but are slowly recovering from enhanced requirements such as individual farm approvals and strict animal tracking.

Russian market helps fuel export record for Paraguay

Paraguay’s 2013 exports were record-large at 255,307 mt, up 31 percent from 2012 and 16 percent above the previous record total posted in 2010. Export value ($1.05 billion) surpassed $1 billion for the first time, increasing 33 percent from 2012.

Paraguay's Beef & Variety Meat Exports in Metric Tons from January 2011 through December 2013

Russia (143,352 mt, +7 percent) was by far the largest destination, but other major markets included Brazil (21,984 mt, -2 percent), Hong Kong (17,609 mt, +116 percent) and Israel (16,520 mt). Exports to Chile – which was a leading market prior to Paraguay’s most recent foot-and-mouth disease outbreak – did not come on strong until August, but still reached 21,534 mt for the year.

Uruguay’s exports slumped significantly in December, pushing its year-end total below 2012. At 23,079 mt, December exports fell 30 percent year-over-year. For January through December, exports were down 3 percent to 280,217 mt. The average unit value was $5,188 per mt, also down 3 percent from a year ago. Uruguay’s 2013 cattle slaughter was down 5 percent at 2.07 million head.

China (82,340 mt) became Uruguay’s largest customer in 2013, tripling the previous year’s volume. This total, which was all frozen, included 18,218 mt of bone-in cuts, 49,719 mt of boneless cuts, and 14,402 mt of offal. Although demand in China has recently cooled due to large inventories of imported beef, Uruguay’s December exports to China remained strong at 7,640 mt, up 39 percent from a year ago.

Chart comparing Uruguay's and the United States' Beef Carcass Prices weekly from August 2011 through January 8, 2014 in dollars

Despite an 8 percent decline in total volume (39,070 mt), the EU was Uruguay’s second-largest export destination in 2013. Significant growth in chilled exports (20,115 mt, +20 percent) to the EU did not fully offset the decline in frozen beef (18,955 mt, -26 percent). Uruguay increased shipments of grain-fed beef under the grain-fed, duty-free quota, but its unit value for chilled exports declined 8 percent to $10,799 per mt. Exports to Russia (30,176 mt, -54 percent) declined sharply in 2013 as Brazil and Paraguay dominated the Russian market and Uruguayan exporters found better prices in China.

Uruguay’s beef carcass prices currently stand at $3.20 per kg, 3 percent below the previous month and down 16 percent year-over-year. This is a reflection of the weaker currency (-11 percent from a year ago against the U.S. dollar), expectations of seasonally larger production, slower demand from China and sluggish domestic demand following the holidays.

Cattle prices in Brazil and Paraguay have rebounded over the past five months, reaching levels on par with Uruguay and above those found in Australia. The latest cattle prices in both Paraguay ($3.28/kg, +4 percent) and Brazil ($3.24/kg, +1 percent) showed modest increases from a year ago.

Sources: Export data from Global Trade Atlas and Uruguay’s National Meat Institute (INAC); cattle price data from INAC and World Beef Report.