With supply rising, cattle prices might fall
This year should see lower cattle prices than in 2012. Last year, the average price per 15-kilo unit was R$ 96.30, in the state of São Paulo.
José Vicente Ferraz, technical director at Informa Economics FNP, believes this downtrend in prices will come about because of the larger supply of cattle ready for slaughter.
Ferraz stresses, however, that there are some internal and external factors that might alter this trend.
The USA has its smallest herd since the government started to track the sector. The high price of grain, the staple diet for animals in the USA, has meant farmers have not made any money.
Another important cattle market, Argentina, continues to have structural problems. It has still not recovered from the recent drought, and there is a great imbalance between remuneration earned by livestock and grain producers. Grain producers profit more. In addition there is government interference in the sector, says Ferraz.
Information provided by Folha de S.Paulo