Greater revenue losses will occur in livestock this year – 07/18/2023 – Vaivém

Cattle farming is one of the sectors that has suffered the most this year. The sector’s 2023 VBP (Gross Production Value) is expected to drop to BRL 134 billion, the lowest since 2019.

If confirmed, this figure will be 9% lower than last year. The VBP is formed based on the volume produced and the prices of the products inside the gate.

Falling international prices, lower external demand and a weaker dollar affect the domestic market. The arroba of fat cattle is at R$ 257, according to Cepea (Center for Advanced Studies in Applied Economics), below the R$ 293 of the beginning of the year.

According to Abrafrigo (Brazilian Association of Frigorificos), beef exports were 1.1 million tons in the first half, a volume with a slight drop compared to the same period last year.

Revenues, however, had a retraction of 21%, retreating to US$ 4.94 billion. This drop occurs because the average value of a ton of beef plummeted from US$ 5,740, in the first half of 2022, to US$ 4,585 this year, according to the association.

The drop in prices in the domestic and foreign markets reflects on the consumer’s pocket. Data from this Tuesday (18) from Fipe (Fundação Instituto de Pesquisas Econômicas) show that beef prices fell 2.2% in the last 30 days in São Paulo. Some cuts, such as sirloin steak, have already accumulated a 13% reduction in 12 months.

The behavior of cattle raising interferes in the country’s total agricultural revenues, since the sector represents 11.7% of the entire national production value. Soy is the leader, with 29%, followed by corn, which participates with 13%.

The VBP is determined by the Ministry of Agriculture and includes 17 agricultural products and five livestock products. The latter includes cattle, chicken, pork, milk and eggs.

Paraná, due to the weight of poultry farming, is the national leader in the value of production in the livestock group, totaling R$ 53 billion. Only the production of the poultry segment should reach R$ 29 billion in the State this year. Minas Gerais and São Paulo come next, with R$41 billion each.

The total VBP for 2023, including crops and livestock, should add up to R$ 1.15 trillion this year, 2.6% above that for 2022. While revenues from crops grow 5%, those from livestock shrink 2.4%, in average.

Russia effect The breaking by Russia of the agreement of an open line in the Black Sea for the Ukraine to export grains heated the market of the main grains produced by the Ukrainians.

Russia effect 2 The September wheat contract, due to Ukraine’s important participation in the international market, rose to US$ 6.71 per bushel (27.2 kg) this Tuesday (18) at the Chicago Stock Exchange.

Russia effect 3 The September corn contract was at US$ 5.29 per bushel (25.4 kg), with an evolution of 5.9%, compared to the previous day.

lower pressure The September contract for soybeans, a product with little representation in Ukrainian production, closed at US$ 14.19 per bushel (27.2 kg), up 0.8%.

In Brazil Commodities had little variation in the national market. A bag of corn was BRL 54.6 in the region of Campinas (SP), and a bag of soybeans, BRL 138 in Paraná. A ton of wheat, also in the Paraná market, fell to R$ 1,342, down 1% on the day.

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