Rancher invests more in beef production in 2019 and sector projects high prices in 2020

The Brazilian rancher invested more in beef production in 2019, according to a survey by the Center for Advanced Studies in Applied Economics of USP (Cepea) in partnership with an animal nutrition company. According to cepea researcher Thiago Bernardino de Carvalho, exports heated and the resumption of consumption in Brazil caused the producer to accelerate the fattening of the animal to take advantage of the record prices offered by refrigerators. The study showed that the number of animals confined in the country grew by 2% last year, reaching 5.26 million heads. "The 2019 figures show that the confinement reached the early 5 million cattle, because we projected to arrive in this herd in 2020," says the researcher at Cepea. For 2020, the forecast is similar growth, around 2%. The number of confined animals is one of the thermometers of what the offer of beef will be like during the year. Confinement is an intensive breeding system in which the producer invests to fatten the ox with feed, which accelerates the process. An animal raised in the pasture takes more than a year to get ready for slaughter, already the confined achieve so in months. Added to producers who opt for semi-confinement, which is the supply of feed in the pasture, there are 13 million cattle within a system that aules fattening. If compared to the total number of animals in the country, about 213 million, it is still a low level, but the sector shows evolution, with growth year after year. According to DSM, a company that participates in the study, with the current structure, Brazilian producers could double the number of confined oxen. "Our survey proves that the producer is increasingly attentive to productivity and profitability," says Marcos Baruselli, manager of the nutrition company. Investment was worth it Producer spending is usually higher in this method, but according to the survey, the investment was worth it in 2019. A rancher who followed Cepea's guidelines achieved a monthly profit of 4.31%. Considering that the confinement period lasts 3 months, the return was 12.9%, well above the national average of 3.26% and from countries such as Argentina and Australia. Aroba price expected to follow high in 2020 Thiago Bernardino de Carvalho, from Cepea, projects that the producer who chooses to lock down could have good profit margins, above what was achieved in 2019. Cepea estimates that the price paid to the rancher by the arroba of the ox (15 kg) will be around R$ 219 this year, taking into account values currently traded in the futures market. As a comparison, the 2019 price record was R$ 231.50 per stick. The researcher did not project the values for the final consumer, but when the stick is high, the price in the supermarket also rises. Carvalho explains that the value is a reflection of China's demand for meat, which is expected to remain high this year, still because of african swine fever, which decimated herds of pigs there. In addition, domestic consumption, opening new markets and high prices of key feed items such as corn and soybeans will not allow lower values. The researcher places as a warning point the unfolding of Covid-19, the new coronavirus, in China's economy and the trade agreement between Chinese and Americans. According to him, there are two factors that can affect the market here in Brazil.