Felipe Fabbri that ranchers were already “prepared” to diversify destinations because trade slows down the 2nd semester
Beef prices should stay up in Brazil even with US tariffs on Brazilian products in the US, reducing the sending of Brazilian meat to the nation, which would increase the supply of products in Brazil and would make prices fall if Brazil had no other markets.
The US usually already buying less beef from Brazil in the 2nd semester because, according to the market analyst and the animal production chain at Scot Consultoria Felipe Fabbr, it is a time when the country reaches the limit of product quotas that can send with lower rates and the Americans stop buying from Brazil and return in the first half of the following year.
“Looking at a short term – I have, September, October, until the end of the year – regardless of the tariff issue, the perception is a higher market and high prices, with firm prices compared to the minimum that the fare has imposed”said in an interview with Poder360.
This is the behavior of the price of the fat cattle. Click here To open the chart in a new guide.
According to Fabbri, Brazil has a quota that guarantees lower tariff – for 4% – for a specific volume of meat. After this quota, the rate becomes larger-a 25%of 25%-and so, according to him, the US market seeks alternatives. Therefore, the Brazilian market already has the planning to diversify the market for the Brazilian product in the 2nd semester.
“Demand for the coming months, regardless of the United States or not, is already planned. The other buyers act more actively in terms of Brazilian meat volume this time of year. In this context, it can be a diluted factor regarding US pressure,” these.
Fixed price contracts
For Fabbri, producers can close minimum price contracts from the Gordo’s Boi Arroba to “It is protected.”
The minimum price contract is an agricultural policy mechanism created to protect the rancher from market oscillations. In this system, the government establishes a reference value, considered the warranty floor.
If the price practiced in the market is below this level, the producer is not required to sell with loss: he can negotiate his production with Conab (National Supply Company) for the minimum price defined or receive from the government the difference between the market value and the established floor, for example.
Descartes
The analyst states that ranchers should not increase female disposal because they see that “Calf prices are attractive this year” and they will prepare for the assembly phase – the herd – from the herd for the production of more calves.
“We believe that this movement should stimulate the producer. The calf has already risen at least 30% in Brazil and, given this increase, we interpret that the rancher must hold females more, instead of discarding them, even in the face of the scenario with the United States.”he said.
