Meat Chains Foresee Recovery
Valor Econômico
The study "Perspectives for the Brazilian Agribusiness" in 2010, made by Rabobank, foresees a better year for the meat productive chains and confirms the projections disclosed by the main associations of slaughterhouses in the last weeks of 2009. And, as in the case of entities such as the Abiec (beef), the Abef (poultry) and Abipecs (swine), the main concern is the exchange rate - that at the current level tends to limit the gains and, thus, limit the recovery in relation to 2009, which was not weaker only because of the strong internal market.
"The meat sector starts 2010 quite strong", says Guilherme Bellotti de Melo, analyst of Rabobank. Besides the setting being more positive for the markets, he assesses, the deepening of the consolidation process has strengthened the major slaughterhouses. In 2009, judicial recoveries and large acquisitions and mergers ruled, in a movement that should continue in 2010, according to Melo. "The diversification of proteins may also allow greater margins to the slaughterhouses", he says, in reference to the investments of beef, poultry and pork traditional slaughterhouses in other chains, including dairy. "Specifically in cattle, the adding of value is more limited. Diversification opens new possibilities", he says.
The study of Rabobank foresees better prices for the beef in the foreign and domestic markets. But it foresees moderate increases, as "consumers will still be very susceptible to any sign that the growth of the economy will not be sustainable". Good news for the slaughterhouses, despite the remark. On the other hand, in case this price increase is not significant, cattle raisers will have a worse year than 2009, once the phase is of replacement of the herds and, therefore, of offer increase. In this context, those working under the system of confinement may come out well.
The horizon is similar for the prices of chicken, and, the strength of the domestic market is similarly pointed as a factor of maintenance of the margins of the slaughterhouse. For the farmers, the bank highlights the expectation that the costs of feed and live animals remain stable and, with that, the margins stay strong. The study indicates that "since it is a product of minor value compared to other kinds of meat, the impacts [of the world crisis] were not as intense as in other markets".
Regarding pork meat, the recovery outlined scenario points to prices and margins for the farmers because of projections of increase in the demand in the internal and external markets. Anyhow, the exchange rate is always an obstacle, even though it was essential for the low food inflation in the country in 2009.