Brazilian beef consumption should drop in early 2022, says Ipea

Directly affected by the embargo imposed by China, which has lasted for nearly three months, the sale of Brazilian beef should drop in early 2022. The forecast is part of a survey released this Wednesday (1) by Institute for Applied Economic Research (IPEA).

Protein suffers from lower domestic demand among Brazilians, largely due to the high prices of the product due to inflation and water scarcity that hit the country in recent months.

With the lack of rain, the harvests of grains used to feed the cattle had a reduction in supply, which increased the price of protein for the final consumer.

“The sharp deterioration in the exchange ratio for the rancher concerns the entire production chain, especially the rancher who must deliver their animals to the industry at the end of 2021 and beginning of 2022”, highlights an excerpt of the research.

“For the cattle breeder, this moment may result, in the medium and long term, in a slowdown in the demand for new lots of weaned animals, precisely when there was a high production cost”.

The IPEA survey also highlights that “the prolonged drought and the high price of grains increase the cost of animal feed. This affects production and makes it difficult to increase the supply of animals in different regions throughout 2021, which will continue to have an effect on prices in early 2022”.

For Hyberville Neto, veterinarian and representative of Scot, a consultancy specializing in the sector, the consumption of beef in Brazil naturally tends to decrease at the beginning of the year. However, the movement may be accentuated due to the embargo practiced by China.

“For the beginning of next year, a calmer flow of beef in Brazil is expected. At the beginning of the year there is usually a reduction in consumption among Brazilians, due to seasonality. In addition, we have to monitor the Chinese embargo, which continues to hamper the sector and could make the situation worse,” highlighted Neto.

Chicken meat

The survey shows that chicken meat should register high demand in the last days of the year, even with the proximity of the end-of-the-year festivities, when an increase in demand for other proteins, such as Christmas birds, is noticed.

The expectation is that demand will remain high for next year due to the replacement of beef by cheaper proteins.

“Even with the end of the year approaching (when there is generally an increase in demand for other meats, such as pork, beef and Christmas poultry, at the expense of chicken), the consumption of chicken protein may continue to rise, precisely due to the increased demand for cheaper proteins”, points out Ipea.

Pig meat

The IPEA survey also indicates an increase in demand for pork in the last quarter of this year, due to the festivities at the time, such as Christmas and New Year’s Eve.

According to the Institute, worldwide demand for the product may rise by 2% in 2022, when compared to this year.