Abstract
Brazil' s agribusiness sector - including livestock and meat - now accounts for
around 25% of total GDP, and since 2005 Brazil has been the world' s leading
meat exporter. Brazilians consume around 72% of the country' s total meat
production, but the main driver of Brazil' s remarkable production growth has
been exports. Over the past 5 years, meat production has been growing steadily
at a cumulative annual growth rate of 4%, but in the same period meat exports
have increased by an average of 14% per year. Although beef and poultry still
account for the bulk of foreign sales, pork exports have also made significant
gains.
The Brazilian Meat and Livestock Industry is the new update to a highly
successful report published in 2006. Recognising the significant changes that
have taken place in the sector since then, Agra FNP has responded to requests
for an update. This new report utilises the extensive database of this sector
with the aim of offering analysis and data that can be utilised by investors,
meat slaughterhouses, producers, importers, equipment manufacturers and all
players involved in the meat chain. This new report includes a 10 year
forecast of the supply of meats in Brazil enabling you to plan your future
strategies.
Dynamic sector
As it expands, the Brazilian meat industry is being transformed by the
strategies adopted by large producers. The country' s leading meat companies
have consolidated their positions through a series of acquisitions, with some
30 takeovers since early 2007. In the beef sector, major groups such as JBS,
Bertin and Marfrig have acquired smaller slaughterhouses in Brazil. Even more
important however is the trend for Brazil' s largest meat companies to expand
their operations beyond the country' s borders. This expansion has been
spearheaded by JBS, whose purchases in the US, Australia and Argentina have
transformed it into the world' s largest beef processor.
Diversification
Product diversification is also a key strategy among the major players with
traditional beef companies making inroads into the poultry, pork and dairy
sectors. In the same way, Brazil' s largest poultry and pork producers - Sadia,
Perdigao and Seara - have diversified into beef and dairy, while also boosting
output of value added products. For example, Sadia recently set up a joint
venture in Russia and Perdigao has been making acquisitions in Europe.
Domestic market prospects
Based on solid growth in demand from lower socio-economic groups, meat
consumption has grown in Brazil in the past five years. This growth has been
enhanced by a federal inspection system which now covers some 55% of domestic
meat sales. Consumption patterns are changing, with poultrymeat gaining in
popularity at the expense of beef. Further growth is likely to be driven by
increased sales of value added products, including processed meats and
convenience foods, along with higher quality meat cuts. These trends are
likely to have an impact on foreign sales, as margins on exports are generally
less than those on the domestic market.
New challenges
Several factors account for Brazil' s emergence as the world' s leading meat
exporter. The availability of pastureland, cheap feed inputs and improved
supply chain have helped drive this success. However animal health concerns
continue to limit access to some of the world' s most lucrative markets.
Meanwhile, there is growing concern over the industry' s impact on the
environment. If Brazil can overcome these barriers and retain its favourable
cost position, the industry can expect to maintain growth in sales both
domestically and on the global market.
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