(iStock.com/ Marcos Assis)
The price indicator of boi Gordo Cepea/B3 accumulates an appreciation of 10.78% in the September partial, at R$ 265.60 until September 25th. In August, the appreciation of the indicator was 3.12%, at R$ 232.50. Thus, there has been a 14.19% increase in prices since August.
According to Hyberville Neto, an analyst at HN Agro, August and September 2024 closed with prices above 20.03% and 12.47%, respectively, than the same months last year.
“Two months of growth may seem short, but generally when it changes to the positive, it usually stays positive. When we look at the participation of females in slaughter, we are seeing a plateau for a few months in the 12-month period. We have a scenario of still high supply, which is positive on the one hand, since even with record slaughters, demand held its own and made the market work steadily and at a high level.”
Signs already point to a turnaround in the bull cycle
Other than that, calf prices, which have already risen 5.17% based on the Esalq/BM&FBovespa indicator, provided support to the market when cattle prices fell in previous months, even though animal values did not rise with as much intensity. cattle, amid a scenario of few animals in pasture, which somewhat suppresses demand.
“There is an expectation that this is the beginning of the turn towards a positive cycle in cattle prices. However, if we consider the participation of females in slaughter there is stability and animal supply levels have not yet decreased in July and August. Demand continues to do very well in the domestic and foreign markets, with domestic availability being well absorbed in Brazil.”
Therefore, for the HN Agro specialist, there are indications that point to a turning point in the market cycle, such as the increase in calf prices.
“Prices just haven’t risen in line with cattle because there is no pasture. When the rains and the trading season return, I see a recovery for the replacement market, which should remove even more females from slaughter and result in a reduction in supply, but for now, there is a brake on the participation of females with a good demand. When demand calms down at the beginning of 2025, we should see a reduction in females”, he analyzes.
In practice, next year will be a period with lower production of carne bovina in Brazil, which in turn implies higher values for arroba and meat, a positive scenario for prices.
Reflections for refrigerators
Consultancy Datagro predicts a drop of -4.6% in cattle slaughter in Brazil in 2025 and -7.5% in 2026, which could increase beef costs in the country. The decrease in supply comes while cattle prices have been at a low since 2020, discouraging herd expansion.
Companies like JBS (JBSS3), Marfrig (MRFG3) e Minerva Foods (BEEF3) may be impacted, as they depend significantly on Brazilian cattle for their production.
According to Genial Investimentos, the market perspective is of a possible extension of the negative cycle in the USA until 2026, which could last until the beginning of 2027.
“If this actually happens, the chances are increasing that there will be a mismatch in the turn of the cycle between the USA and Brazil, which could harm the theses of JBS (to a greater extent) and Minerva (to a lesser extent)”, say Iago Souza, Eduardo Nishio and Ygor Bastos.