Opportunities in the Animal Protein Market: Brazil as a Powerhouse

Brazils animal protein production market presents development opportunities, with the prospect of increasing exports. 

November 1, 2023

hEDGEpoint Global Markets

The future of the animal protein production market in Brazil is promising for the entire chain. Optimistic trends abound and clearly place the country in a leading role in terms of providing more food security to the world. 

 The development of this sector is making the country a truly productive powerhouse of animal protein. With that in mind, we’ve decided to explain in detail:  

  • The current situation in the Brazilian animal protein production market 
  • Opportunities and trends for Brazil 
  • The nation’s importance on the global stage 

We’ve invited John Payne, Relationship Manager at hEDGEpoint, to talk about the increasing relevance of hedging for players in this sector. 

Keep reading to find out more! 

What’s the current situation in Brazil’s animal protein production market? 

The United States Department of Agriculture (USDA) projects an 8% growth rate for Brazilian beef production in 2023. The total number is expected to be 11.16 million tons. 

A drop in the price of calves, an increase in female slaughter, and the recovery of lean and fat cattle are all factors that contribute to this increase. The consumer will feel the impact of such a price drop. Rabobank’s estimate is for greater domestic demand. Consumption per inhabitant should grow 1.5% a year, moving up from 27.7 kg to 28.2 kg per year. 

In Brazil, pork production will also rise in 2023. The increase estimated by the USDA is 7% compared to 2022, reaching a mark of 4.65 million tons. The agency has also signaled a 3% expansion in chicken meat production in the country this year, totaling 14.9 million tons. This is the highest rate among the four main players in the sector. 

Brazilian Gross Domestic Product (GDP) recorded 1.9% growth in the first quarter of 2023, compared to the fourth quarter of 2022. The result was mainly driven by agriculture. The sector showed a 21.6% growth rate, the highest since the fourth quarter of 1996. 

The evolution and improvement in productivity define the Brazilian animal protein production chain and contribute to promising indicators. In a market full of opportunities, Brazil now occupies a prominent global position. 

How is the Brazilian animal production market linked to the global scenario? 

The Food and Agriculture Organization (FAO) of the United Nations (UN) expects per capita consumption of beef and pork to grow by around 10% over the next decade. In terms of poultry consumption, the increase is estimated to be 15%. 

This market’s growth rate is justified by the globe’s population growth and by the development of emerging countries. According to the United Nations, the planet reached the mark of eight billion inhabitants in 2022. 

In general, the higher a nation’s GDP per capita, the higher its meat consumption per inhabitant. Just look at the United States, the world’s main beef consumer. It’s in the context of this growing market that Brazil has the chance to strengthen its participation. John Payne explains: “With the enormous potential to satisfy American demand, Brazil could expand its market. The country is enjoying a record grain harvest to be able to better feed livestock, combined with excellent export capacity.” 

The USDA has announced these likely increases in Brazil’s 2023 exports:  

  • 4% more chicken meat exported (4.8 million tons) 
  • 1% more beef exported (2.975 million tons) 
  • 3% more pork exported (1.335 million tons) 

With these numbers, the country should be the fourth largest exporter of animal protein in 2023, responsible for 25% of the world’s exports. Global demand for Brazilian meat is expected to grow due to production problems experienced by competitors. 

The U.S. and Europe have both suffered from recent outbreaks of bird flu, in addition to their involvement in the Ukraine War. Brazil should benefit, with China as its main importing partner. However, Chinese demand will be lower due to the recovery of its herds from African Swine Fever (ASF). 

Understand the role of risk management in this market 

John Payne remarked that companies offering risk management solutions, such as hEDGEpoint, contribute to connecting countries and helping to carry out better negotiations. “Market intelligence and the need to have a partner that understands global dynamics come into play. In the case of the animal protein production sector, it’s essential to understand the scenarios in South America. Very important countries, such as Brazil and Argentina, exist in the region,” he clarified. 

After the pandemic, producers intensified their concerns over rising beef prices. Seeking markets with more interesting prices is vital for those who want to hedge. 

“hEDGEpoint needs to link these markets to carry out risk management, combining instruments that satisfy both buyers and sellers,” concluded Payne. 

Working with sophisticated hedging instruments, hEDGEpoint combines data analysis and insight to protect against volatility and the consequent price variations. We customize our tools according to each business model and stage of the chain. 

Talk to us today to find out more! 


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