According to the Brazilian Frozen Food Association (Abrafrigo), due to the increase in the price of whole cattle and the decline in the purchasing power of Brazilian households due to the economic crisis, the profits of Brazilian beef-related industries have been affected, causing a wave of temporary suspension of production, reducing the amount of slaughter and Supply to consumers.
Brazil’s “São Paulo Page” reported on April 12 that Abrafrigo Chairman Paulo Mustefaga (Paulo Mustefaga) confirmed that some large, medium and small production units have been suspended or are currently shutting down, but he does not know the specifics. Number.
An insider who asked not to be named stated that Minerva Foods, the largest beef exporter in South America, is located in Mirassol d’Oeste, Mato Grosso (MT) The production unit of the company has temporarily suspended operations, employees take collective leave, and the resumption time is yet to be determined.
The source also added that last month, the company’s plant in the state of São Paulo (SP) suspended production for about 20 days and has now resumed normal operations. Several other large beef processors in Brazil have also experienced similar situations.
According to Mustefaga, the price of cattle has risen by about 60%within a year, and the industry has passed on up to 40%of the cost. Due to insufficient supply of cattle and strong external demand, the price of whole cattle reached a record high of 320 reais.
It is reported that the new crown quarantine measures and the increase in the price of grains used for feed such as corn and soybean meal have placed a burden on feedlots and worsened the situation of the Brazilian livestock industry.
In addition, good beef exports are also one of the reasons why beef prices remain high. Abrafrigo’s data shows that in March alone, Brazilian beef exports increased by 8%compared to the same period last year, thanks to the increase in China’s beef purchases.
In addition to price increases, the decline in purchasing power of Brazilian households due to the economic crisis is also a major reason for the suspension of production.
Mustefaga believes that due to the dry season on the ranch, cattle supply may increase in the next two months, but overall, restrictions on animal slaughter may continue until 2022.