Brazil’s FOB average price for export beef in June was the lowest in 21 months, trade sources reported.
Brazil exported 74,000t of fresh beef at an average FOB price of US$4671/t in June, according to the country’s Overseas Trade Agency, Secex.
That figure is down 2.5pc since May and the lowest seen since October 2010.
As a simple volume comparison, Australia’s exports for the month of June reached 81,586t.
Brazil’s volume was 4.5pc below the same month in 2011, reversing the strong growth in exports seen in May. That trend is mirrored in Australia’s result, down 5pc on June last year.
The biggest impact on Brazil’s recent export trade has been the large reduction in shipments to Russia, due both to more subdued demand and regulatory suspensions placed by Russian authorities on many Brazilian export abattoirs.
During the first half (January-June) Brazil exported 414,000t of beef, 1.6pc above the same period in 2011, at an average FOB price of US$4836/t, down 2.9pc on year-earlier figures.
Similar value/volume trends were evident in Brazil’s pork and poultry meat exports.
Brazilian forecasting agency Informa Economics FNP suggests Brazil should regain first position among the world’s largest beef exporters in 2012, driven by improved competitiveness and restrictions faced by export competitors like the US and Australia to widen their offer.
FNP suggests that Brazil may export 1.465 million tonnes this year, edging ahead of Australia 1.38mt and the US, 1.24mt.
Both countries faced difficulties in increasing exports this year.
In the case of the US, drought was again re-emerging as a big production hand-brake.
The area of the US currently afflicted by drought was already larger than last year, FNP said.
“This year’s US drought, however, is worse in many ways and likely to be much more expensive to both agriculture and to consumers,” the company said.
According to US National Drought Mitigation Centre, 72pc of US was currently classified as ‘abnormally dry’ or worse.
By comparison, at the end of the third week in June last year just 32pc was classified the same way.
Some meteorologists are already comparing this year to the drought of 1988, which was estimated to cost American agriculture US$78 billion.
Last year’s drought also had a big impact on the US cattle industry and strained the financial resources of many ranchers.
The US Department of Agriculture reported that in May, dairy cows sent to slaughter totalled 251,000 head, about 31,000 more than year-ago levels.
So far this year about 1.3 million dairy cows have been slaughtered, 4.4pc up on last year.
Although the pace of increase in US retail beef prices has slowed from that of last year, retail beef prices have continued to rise faster than food prices overall, according to the latest USDA Consumer Price Index for Food.
The report shows beef prices increased by 0.6pc between April and May, and 5.4pc between May 2011 and May 2012.
For this year, USDA projects an annual increase of 4-5pc over 2011.
The projected annual increase is one of the highest among food categories listed in the report, but is well below the 10.2pc annual in-crease in US beef prices last year.
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