2011 Brazilian Beef Exports Down 10 Per Cent

BRAZIL - Despite a year of declining sales in 2011, the Brazilian Association of Meat Export Industries (ABIEC) expects a recovery in 2012, with the potential to increase revenue from shipments to more than $6 billion.
calendar icon 23 January 2012
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In 2011, shipments totalled 1.097 million tonnes, 10.8 per cent less than the year before, according to Abiec.

Despite the decline in volumes, revenues with total beef exports grew 11.65 per cent, from $4.814 billion in 2010 to $5.375 billion last year.

Although the volumes have fallen, the increase of 25.1 per cent in the average price of beef exports in 2011 led to an increase in revenue.

"With this result, exports returned to the level of 2008," said Anthony Camardelli, president of Abiec.

Of its main markets, exports to the EU fell by 10 per cent, only reaching 109 500 tonnes last year compared with 121,700 tonnes in 2010, according to Abiec.

According to Mr Camardelli, the reason for the lower volumes is the reduced supply of animals for slaughter. Only 2000 farms reach the requirements need to supply cattle for sale to the EU, which equates to about 4.3 million head.

"The average price rose because of lower supply and sale of prime cuts."

In 2008 there were 26,000 properties approved and an offer of 26 million head of cattle.

The crisis in the EU has also influenced the decline in sales, according to the President. But he added that there are reflexes in both consumption and production on the continent, since there is a reduction of subsidies.

"Chances are you will not find filet mignon anywhere in Europe today," he said.

Sales for Brazil's largest customer, Russia, fell 19.45 per cent in 2011 to 237,500 tonnes. As in shipments to the EU, the average price also rose, but not enough to prevent a drop in revenue, which dropped from $1.071 billion in 2010 to $1.060 billion last year.

The Russian embargo on meat exporting establishments in Brazil explains the decline in sales, but the expectation is to resume the Abiec volumes in 2012.

Brazil has also faced a setback in the US market. The volumes shipped to the US fell last year, still a reflection of the anthelmintic ivermectin episode which occurred in May 2010. In 2010, the US found residues above the allowable dewormer in beef from Brazil. The market was closed by the end of 2010. Even with the reopening of the market, volumes continued to fall last year.

2011 volumes were only 13,000 tons, 6.72 per cent less than in 2010. Revenue increased 112 per cent to $166.5 million, due to the skyrocketing price of meat.

"The price went up because of the high cost to meet the requirements [of Americans]," said Mr Camardelli. "The need to do several tests during the process to check for residue raises the costs of production for the sector, and means Brazil loses competitiveness."

But not everything was falling. Sales rose to Chile, especially from October, after the appearance of foot and mouth outbreak in Paraguay. The country, which exported meat to the Chilean market, has suspended sales and paved the way for Brazil.

The result was a shipment of 35,500 tonnes, up 66 per cent over 2010. Revenue from sales to Chile grew 102.8 per cent to $208.9 million last year.

The forecast growth in exports of beef this year - 10 per cent in volume and 20 per cent in revenue - is based the prospect of recovery in sales to major markets of Brazil, and Russia, which should enable more refrigerators.

For the European Union, Abiec also includes an increase in shipments for 2012, after the EU announced that it wanted to reduce bureaucracy. The EU will now allow Brazil to take care of managing the list of farms able to export and publish it - until now, it was up to the EU.

This decision leaves room for a revision of the rules that defined the criteria for qualification of the properties and for a relaxation of requirements.

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