Brazilian Livestock Profile. Annual Report

Transcription

1 2018 Brazilian Livestock Profile Annual Report

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3 Contents Brazilian Livestock Profile The importance of Brazilian livestock farming 08 Chain and jobs quantification 12 Livestock farming in Brazil 20 Livestock farming worldwide 30 Industry 34 Brazilian Exports 36 Livestock retrospective and projections 42 Sustainability 44 Health 46

4 2017 was, without a doubt, a challenging period for Brazilian livestock. The country's political and economic scenario remained unstable and showed difficulties of recovery, although the GDP reacted and presented an 1% growth. At the same time, the meat supply chain had to restructure themselves to face a serious crisis that raised suspicion from the international markets and put into question the credibility of the Brazilian product. Fortunately, we can say that this episode strengthened the sector, and allowed it to improve processes and strengthen the dialogue with countries that import our meat. Proof of this is that, even in this scenario, Brazilian beef exports closed the year with a revenue of US$ 6.2 billion, a 13% growth compared to In volume, shipments totaled 1,533 thousand tonnes, a 9% increase compared to the same period in the previous year. The figures show Brazil's strength as the world's leading beef supplier and reveal the chain's ability to react and refine its production models to meet market needs. This way, ABIEC is aligned with the interests of its 32 associated companies, working to expand exports, to reduce trade barriers and to promote Brazilian beef worldwide. A work focused on the continuous improvement of production processes, and the quality and sustainability of the product. Based on this commitment, we estimate that in 2018 we will have an increase in volume shipped and growth in export sales. New markets one of the focus of the association, which also intends to increase the presence of Brazilian products in partner countries, always guided by 6 Brazilian Livestock Profile

5 the principles of ethics and transparency. For this work to be efficient, we have to maintain a solid and reliable base of information and business intelligence. So, ABIEC presents in this report the main data that map the entire Brazilian livestock performance in The information comes from reliable sources that give credibility to the publication. We expect this material to be another contribution of this association to the growth and development of our industry. Antonio Jorge Camardelli President of the Brazilian Beef Exporters Association (ABIEC) Brazilian Livestock Profile 7

6 1 The importance of Brazilian livestock farming Brazil closed 2017 registering a growth in the Gross Domestic Product (GDP), which reached R$ 6.56 trillion. In the same period, agribusiness GDP went from R$ 1.44 trillion in 2016 to 1.42 trillion in 2017, while livestock GDP increased 0.69% to R$ 433 billion. 8 Brazilian Livestock Profile

7 In 2017, agribusiness GDP accounted for 22% of country s total GDP. Meanwhile, livestock GDP accounted for 31% of agribusiness GDP. Beef exports, accounting for 3.2% of all Brazil's exports in 2017, grew 9.6% in volume and 13.9% in revenues, being fundamental to maintain the trade surplus in Brazil, together with the balance of agribusiness as a whole. Livestock GDP accounted for 31% of agribusiness GDP Brazilian Livestock Profile 9

8 Graph 1 *TOTAL GDP, AGRIBUSINESS GDP, LIVESTOCK FARMING GPD (GDP SINCE R$ TRILLION) 1.40 TOTAL GDP AGRIBUSINESS GDP LIVESTOCK FARMING GDP Source: Athenagro, Cepea/USP, CNA (Agribusiness GDP); IBGE (Total GDP) *Adjusted methodology based on available indicators Graph 2 AGRIBUSINESS GDP REPRESENTATION IN BRAZIL IN 2017 Agribusiness GDP 22% 2017 R$ (trillion) Other sectors GDP % Agribusiness GDP % TOTAL GDP in Brazil 6.56 Source: Cepea/USP, CNA (Agribusiness GDP); IBGE (Total GDP) Other sectors GDP 78% 10 Brazilian Livestock Profile

9 Graph 3 LIVESTOCK FARMING GDP AND AGRICULTURE GDP REPRESENTATION IN BRAZIL S AGRIBUSINESS GDP IN 2017 Livestock Farming GDP 31% 2017 RS (trillion) Agriculture % Livestock Farming % Agribusiness 1.42 Source: Athenagro, dados Cepea/USP, CNA (Agribusiness GDP); IBGE (Total GDP) Agriculture GDP 69% Graph 4 AGRIBUSINESS BALANCE - BILLIONS US$ AGRIBUSINESS BALANCE OTHER PRODUCTS BALANCE TOTAL BALANCE OF BRAZIL Source: Athenagro, Agrostat, SECEX/MDIC, Conab Brazilian Livestock Profile 11

10 2 Chain and jobs quantification The beef cattle business moved R$ billion in This number represents a 3.6% increase compared to the R$504 billion total in In almost a decade, the amount generated by the beef cattle supply chain increased more than 80%, from the inputs used in livestock production, through the sales of animals, to the total sales by industry and retail. Even with a reduction in total livestock turnover (1.25%), there was a growth in the revenue of slaughterhouses (+0.75%) - mainly due to growth in beef for the domestic market (+1.22%), and exports (+4.17%). In addition, items such as industrial inputs and services (+8.7%) and total retail revenues (+9.9%) also registered growth. In 2017, livestock was responsible for the creation of 353,725 job openings with a formal contract, according to data from the General Register of Employment and Unemployment (CAGED). This number represents a 0.4% increase compared to the jobs created in When we observe the balance of jobs, which is the difference between job vacancies created and In 2017, the amount moved by the chain totaled R$ billion, a 3.6% increase compared to closed, the balance of livestock was positive, with 8,371. In 2016, the balance had been negative, with -2, Brazilian Livestock Profile

11 Brazilian Livestock Profile 13

12 Scheme 1 CHAIN MAPPING BEEF AGROINDUSTRIAL SYSTEM Livestock farming Agribusiness Transactions in 2017 Inputs and services for livestock production R$ billion At farms R$ billion Feed 10,357.6 Protocols and semen Cattle health 2,312.9 R$million Diesel and electric power 6,857.9 Agricultural inputs 10,410.5 Maintenance, services and parts 6,389.5 Employees and duties 11,055.0 Bulls 1,345.8 Machinery, equipment and animals for work 1,565.2 Improvements and building materials 3,767.4 Replenishment cattle 17,582.6 Male 13,854.2 Female 3,728.4 Animals for breeding 2,378.1 Slaughtered cattle 75,041.7 Male 49,451.8 Female 25,590.0 Live cattle exports Semen exports 7.3 Other livestock revenue Services, supplies and inputs farms Auctions and brokers Inputs freight Technical services Administrative and accounting services Living animal freight inter farms Cattle for slaughter in the property , ,091.2 Demands for inputs industries Advertising, marketing and events Private research and studies Support Services * item not added to the chain transaction / ** total is already included in the prices and costs / *** Estimates by income effect; the total will comprise other productive chains, proportionally Source: Athenagro, Abiec, Secex, IBGE, Cepea, BNDES 14 Brazilian Livestock Profile

13 R$ billion Inputs and industry services R$ billion Slaughterhouse revenue R$ billion Retails inputs and services R$ billion Total Retail revenue R$ billion Packaging 1,477.4 Beef domestic market 83,246.1 Beef retail ,2 Electric power 1,290.6 Beef exports 19,396.9 Other products retail ,4 PPE s Leather exports 6,029.9 Inputs for operation 1,038.6 Leather domestic market 3,198.2 Services 2,062.9 Tallow domestic market 1,174.5 Live cattle freight 1,579.8 Other subproducts 11,638.1 Beef freight Employees 20,935.6 Administrative, associations and marketing 4,011.2 Other fixed cost 16,002.8 Social impacts related to the productive chain - estimate * Taxes and Unions contributions** External wages created by income effect *** 81, , Retail Services and Costs Staff and services Intra retail packaging and freight Services and supplies in butchers 14, New methodology: Elaborated by Athenagro, from the livestock universe and technical and marketing indicators Data check: carried out using information from Sindirações, Conab, CNA, Sindan, Asbram, Asbia, BNDES, Balance of companies,firjan e Agroconsult s agricultural division Brazilian Livestock Profile 15

14 Table 1 LIVESTOCK FARMING AGRIBUSINESS TRANSACTIONS FROM 2007 TO ADJUSTED METHODOLOGY Year R$ billion US$ billion Source: Athenagro / ABIEC / SECEX / IBGE / CEPEA / BNDES - Prepared by ABIEC Table 2 LIVESTOCK FARMING AGRIBUSINESS TRANSACTIONS FROM 2007 TO ADJUSTED METHODOLOGY Year R$ billion Inputs and industry services R$ billion Advertising, marketing and events Private research and studies Support services Inputs and services for livestock production R$ billion Feed 9, , , ,357.6 Protocols and semen Cattle health 1, , , ,312.9 Diesel and electric power 5, , , ,857.9 Agricultural inputs 8, , , ,410.5 Maintenance, services and parts 4, , , ,389.5 Employees and duties 7, , , ,055.0 Bulls 1, , , ,345.8 Machinery, equipment and animals for work 4, , , ,565.2 Improvements and building materials 10, , , ,767.4 Services, supplies and inputs farms 5, , , ,534.6 Auctions and brokers Inputs freight 2, , , ,928.2 Technical services Administrative and accounting services Living animal freight inter farms Cattle for slaughter in the property 1, , , , Brazilian Livestock Profile

15 Total livestock turnover R$ billion Replenishment cattle 14, , , ,582.6 Male 11, , , , Female 3, , , , Animals for breeding 2, , , , Slaughtered cattle 71, , , ,041.7 Male 46, , , , Female 24, , , , Live cattle exports 1, Semen exports Other livestock revenue Inputs and industry services R$ billion Packaging 1, , , , Electric power 1, , , ,290.6 PPEs Inputs for the operation ,038.6 Services 1, , , ,062.9 Live cattle freight 1, , , ,579.8 Beef freight Employees 18, , , ,935.6 Administrative, associations and marketing 3, , , ,011.2 Other fixed costs 13, , , ,002.8 Slaughterhouses revenue R$ billion Beef domestic market 72, , , ,246.1 Beef exports 16, , , ,396.9 Leather exports 6, , , ,029.9 Leather domestic market 2, , ,639,2 3,198.2 Tallow domestic market 1, , ,401,4 1,174.5 Other subproducts 10, , ,783,2 11,638.1 Retail inputs and services R$ billion Staff and services R$ milhões 11, , , ,406.1 Intra retail packaging and freight R$ milhões Services and supplies in butchers shops R$ milhões 1, , Total retail revenue R$ billion Beef retail 125, , , ,355.2 Other products retail 17, , , ,579.3 Social impacts related to the productive chain * R$ billion Taxes and union contributions ** 69, , , ,416.9 External wages created by income effect *** 24, , , ,264.1 * item not added to the chain transaction / ** total is already included in the prices and costs / *** Estimates by income effect; the total will comprise other productive chains, proportionally Source: Athenagro / ABIEC / SECEX / IBGE / CEPEA / BNDES New methodology: Elaborated by Athenagro, from the livestock universe and technical and marketing indicators Data check: carried out using information from Sindirações, Conab, CNA, Sindan, Asbram, Asbia, BNDES, Balance of companies, Firjan e Agroconsult s agricultural division Brazilian Livestock Profile 17

16 Table 3 BALANCE OF FORMAL JOBS GENERATED BY THE CATTLE LIVESTOCK GROWING CHAIN Job class - balance of jobs Formal Jobs Finishing of Leather Footwear Under Contract ,508-3, ,465 Livestock Support Activities not Previously Specified Animal Feed Wholesales Live Animal Wholesales Beef, Pork and Byproduct Wholesales 3,195 1, ,579 Wholesale of Leather, Wool, Furs and Other Non-Edible Byproducts of Animal Origin Wholesale of Medications and Drugs for Veterinary Use Retail Meat Sales Butchers 3,301 1,953 1,081 1,675 1,913 Retail Sales of Veterinary Medications 1,079 1, Beef Cattle Growers -3,526-1,865 1, ,094 Tanning and Other Leather Preparations 557-1,865-1, ,032 Manufacture of Animal Feed 1,757 2,805 2, ,931 Manufacture of Leather Goods not Previously Specified Manufacture of Leather Footwear -8,288-11,511-11,032 1,922-3,659 Manufacture of Medications for Veterinary Use Manufacture of Meat Products ,592 1,139 Meatpacking Cattle Slaughter 7,502 1,042-6,683-1,399 8,894 Maintenance and Repair of Agriculture and Livestock Machinery and Equipment Total 6,985-6,509-18,726-2,357 8,371 Job class jobs openings created Formal Jobs Finishing of Leather Footwear Under Contract 24,058 21,149 16,156 14,413 13,021 Livestock Support Activities not Previously Specified 12,120 13,102 12,092 10,297 9,847 Animal Feed Wholesales 6,211 6,623 6,068 5,332 5,175 Live Animal Wholesales 1,087 1, Beef, Pork and Byproduct Wholesales 18,867 17,520 14,744 11,924 12,811 Wholesale of Leather, Wool, Furs and Other Non-Edible Byproducts of Animal Origin 1,274 1, Wholesale of Medications and Drugs for Veterinary Use 1,888 1,889 1,980 1,992 2,308 Retail Meat Sales Butchers 40,349 40,632 37,055 35,654 36,537 Retail Sales of Veterinary Medications 11,700 12,553 11,092 10,123 10,315 Beef Cattle Growers 118, , , ,61 109,435 Tanning and Other Leather Preparations 21,740 19,853 15,123 13,009 12,024 Manufacture of Animal Feed 22,002 24,167 21,472 16,856 17,748 Manufacture of Leather Goods not Previously Specified 6,559 6,462 4,996 4,088 3,358 Manufacture of Leather Footwear 83,027 74,189 58,360 53,049 47,171 Manufacture of Medications for Veterinary Use 2,794 2,716 2,380 1,852 2,171 Manufacture of Meat Products 24,714 24,477 19,353 15,169 15,347 Meatpacking Cattle Slaughter 70,886 62,572 53,494 42,263 51,466 Maintenance and Repair of Agriculture and Livestock Machinery and Equipment 2,783 3,359 2,717 3,213 3,443 Total 470, , , , , Brazilian Livestock Profile

17 Job class jobs lost Formal Jobs Finishing of Leather Footwear Under Contract -24,652-22,657-19,224-14,309-14,486 Livestock Support Activities not Previously Specified -12,283-13,366-12,134-10,944-9,931 Animal Feed Wholesales -5,562-5,948-5,802-5,288-4,847 Live Animal Wholesales -1,028-1, Beef, Pork and Byproduct Wholesales -15,672-16,133-14,847-12,047-11,232 Wholesale of Leather, Wool, Furs and Other Non-Edible Byproducts of Animal Origin -1,219-1,312-1, Wholesale of Medications and Drugs for Veterinary Use -1,632-1,671-1,841-1,802-1,965 Retail Meat Sales Butchers -37,048-38,679-35,974-33,979-34,624 Retail Sales of Veterinary Medications -10,621-11,243-10,764-9,817-9,924 Beef Cattle Growers -121, , , , ,529 Tanning and Other Leather Preparations -21,183-21,718-16,879-13,861-13,056 Manufacture of Animal Feed -20,245-21,362-19,340-17,418-15,817 Manufacture of Leather Goods not Previously Specified -7,016-6,795-5,818-4,546-3,685 Manufacture of Leather Footwear -91,315-85,700-69,392-51,127-50,830 Manufacture of Medications for Veterinary Use -2,577-2,259-2,161-1,866-1,988 Manufacture of Meat Products -23,741-23,955-20,113-16,761-14,208 Meatpacking Cattle Slaughter -63,384-61,530-60,177-43,662-42,572 Maintenance and Repair of Agriculture and Livestock Machinery and Equipments -2,370-2,898-2,831-2,954-3,169 Total -463, , , , ,354 Source: MTE/CAGED Brazilian Livestock Profile 19

18 3 Livestock Farming in Brazil In 2017, the Brazilian cattle herd was million head. The number of cattle slaughter was 39.2 million head. So, the volume of meat produced reached 9.71 million T of carcass-weight equivalent (CWE). Of the total beef produced, 20% was exported and 80% supplied the domestic market, ensuring consumption of around 37.5 kg of beef per capita in million pasture hectares Stocking rate: 1.34 head/ha Occupation rate: 0.94 UA/ha Live cattle import 240 heads Cattle Herd million heads Live cattle exports 407,365 heads Carcass average weight: kg Avarage carcass yield: (zebu): 52.3%-55% EXPORTS (20.9%) million T CWE Slaughter 39.2 million heads Beef production 9.71 million T CWE Offtake: 19.4% Apparent offtake: 17.7% Feedlots: 4.09 million heads (10.44% of total slaughter) Domestic market 7.73 million T CWE (79.06% of production) + 57 thousand T CWE of importation Per capita consumption: kg/year 77.41% In Natura 1.57 million T CWE 11.04% Processed thousand T CWE 11.54% Offals and others thousand T CWE 93 countries Hong Kong: 20% China: 18% Egypt: 12% Russia: 11% Others: 39% 92 countries EU-28: 42% USA: 27% Others: 31% 78 countries Hong Kong: 66% Russia: 6% Ivory Coast: 4% Others: 24% Source: Athenagro, data Secex/MDIC, IBGE - - Prepared by ABIEC 20 Brazilian Livestock Profile

19 The average consumption per capita was slightly more than 37 kilos of beef in 2017 Brazilian Livestock Profile 21

20 Graph 5 BRAZILIAN CATTLE HERD - MILLION HEADS * *2017 Source: IBGE, Mapa, Athenagro *Preliminary Graph 6 BRAZILIAN CATTLE HERD DEVELOPMENT PER REGION - MILLION HEADS *2017 NORTH NORTHEAST SOUTHEAST SOUTH CENTRAL WEST Source: IBGE, Athenagro * Preliminary 22 Brazilian Livestock Profile

21 Table 4 CATTLE HERD - STATE STATE CATTLE HERD - ESTIMATE IN 2017 (HEADS)* STATE CATTLE HERD PERCENTAGE IN BRAZIL TOTAL (%) CATTLE HERD GROWTH IN THE LAST 11 YEARS (%) % OF CATTLE EXCLUSIVELY DESTINED FOR SLAUGHTER PER STATE NUMBER OF PROPERTIES CONTAINING CATTLE** Mato Grosso 31, % 19.63% 94.60% 82,558 Minas Gerais 23,856, % 7.45% 41.36% 354,062 Goiás 23,213, % 12.43% 68.51% 111,693 Mato Grosso do Sul 22,487, % -5.22% 94.65% 48,601 Pará 20,475, % 16.99% 89.56% 83,688 Rio Grande do Sul 13,781, % -1.38% 77.16% 329,901 Rondônia 13,762, % 19.84% 82.20% 63,273 São Paulo 11,481, % % 73.34% 128,238 Bahia 10,503, % -2.43% 56.97% 314,243 Paraná 9,680, % -0.86% 65.42% 211,936 Tocantins 8,739, % 12.61% 86.56% 43,348 Maranhão 7,569, % 14.46% 77.94% 93,263 Santa Catarina 4,486, % 29.63% 34.64% 147,338 Acre 3,013, % 22.86% 93.00% 18,626 Ceará 2,450, % 4.14% 41.63% 124,456 Rio de Janeiro 2,403, % 14.70% 51.15% 30,464 Espírito Santo 2,051, % -3.21% 53.80% 30,935 Pernambuco 2,039, % -2.67% 50.91% 140,226 Piauí 1,684, % -8.37% 80.72% 75,469 Amazonas 1,362, % 9.61% 78.27% 13,782 Alagoas 1,273, % 23.75% 64.74% 45,135 Paraíba 1,242, % 13.72% 59.31% 92,024 Sergipe 1,211, % 13.51% 49.51% 40,663 Rio Grande do Norte 910, % % 49.55% 47,480 Roraima 771, % 51.65% 86.63% 4,732 Distrito Federal 98, % -0.23% 68.36% 1,597 Amapá 71, % % 72.23% 661 BRAZIL 221,805, % % 74.43% 2,678,392 Source: Athenagro, IBGE * Preliminary data stock for the end of year ** Data provided in the last Census Brazilian Livestock Profile 23

22 Table 5 CATTLE HERD IN THE MAJOR LIVESTOCK FARMING MUNICIPALITIES IN BRAZIL AND CATTLE HERD GROWTH Muinicipality/State Cattle herd in 1997 (heads) Cattle herd in 2007 (heads) Cattle herd in 2017 (heads)* Cattle herd growth in the last 20 years (heads) Cattle herd growth in the last 10 years (heads) Cattle herd growth in the last 20 years (%) Cattle herd growth in the last 10 years (%) São Félix do Xingu - PA 216,699 1,653,231 2,236,438 2,019, , % 35.28% Corumbá - MS 1,598,477 1,811,254 1,849, ,383 38, % 2.13% Ribas do Rio Pardo - MS 1,002,191 1,174,380 1,166, ,695-7, % -0.64% Cáceres - MT 503, ,292 1,131, , , % 35.94% Marabá - PA 183, ,300 1,090, , , % % Vila Bela da Santíssima Trindade - MT 387, ,469 1,020, , , % 21.52% Juara - MT 507, , , , , % 22.04% Novo Repartimento - PA 118, , , , , % % Porto Velho - RO 113, , , , , % 61.14% Aquidauana - MS 588, , , ,136-13, % -1.72% Cumaru do Norte - PA 103, , , , , % 83.65% Nova Crixás - GO 458, , , ,184 49, % 6.97% Alta Floresta - MT 423, , , ,052-30, % -4.06% Porto Murtinho - MS 553, , , ,163 36, % 5.42% Juína - MT 304, , , , , % 35.94% Pontes e Lacerda - MT 470, , , , , % 22.64% Vila Rica - MT 211, , , ,561 22, % 3.51% Alegrete - RS 591, , ,526 68, , % 24.42% Sant'Ana do Livramento - RS 477, , , , , % 22.73% Três Lagoas - MS 821, , , , , % % Altamira - PA 118, , , , , % 66.08% Santa Maria das Barreiras - PA 178, , , ,419 78, % 13.97% Rio Verde de Mato Grosso - MS 488, , , ,201 63, % 11.52% Água Azul do Norte - PA 197, , , , , % 53.90% Porto Esperidião - MT 236, , , , , % 28.00% Camapuã - MS 660, , ,293-65,802 3, % 0.66% Pacajá - PA 81, , , , , % % Novo Progresso - PA 87, , , , , % % Nova Mamoré - RO 55, , , , , % 80.86% Santana do Araguaia - PA 225, , , , , % 21.16% Itupiranga - PA 79, , , , , % 97.07% São Miguel do Araguaia - GO 360, , , , , % 20.65% Campo Grande - MS 548, , ,853 12,388-15, % -2.74% Rio Branco - AC 159, , , , , % 44.74% Santo Antônio do Leverger - MT 285, , , , , % 45.71% Santa Rita do Pardo - MS 492, , ,188 77,001 58,553 15,64% 11.47% Coxim - MS 394, , , ,349 76, % 16.13% Jaru - RO 217, , , ,684 34, % 6.91% Paranaíba - MS 517, , ,024 41,551 64, % 13.12% Xinguara - PA 515, , , , % 28.90% Água Clara - MS 634, , , , , % % Source: Athenagro, IBGE *Preliminary data stock for the end of the year 24 Brazilian Livestock Profile

23 Graph 7 CATTLE FEEDLOTS (MILLION HEADS) AND ITS REPRESENTATIVENESS IN THE TOTAL CATTLE SLAUGHTERED IN BRAZIL (%) 6 CATTLE FEEDLOTS - MILLION HEADS 5 % OF CATTLE IN FEEDLOTS IN THE TOTAL SLAUGHTERED IN BRAZIL 15% 14.09% 13.08% 13.42% 12% % 9.15% 7.58% 6.91% 9.93% 10.16% 8.75% 9% 8.41% 8.62% % 9.96% 7.76% 7.30% 7.22% 6% 3% Fonte: Athenagro, IBGE 0% 2017 * *Preliminary Map 1 CATTLE HERD DISTRIBUTION IN BRAZIL Roraima Amapá Pará Amazonas Ceará Rio Grande do Norte Maranhão Piauí Acre Bahia Mato Grosso Goiás State Borders Minas Gerais Espirito Santo Mato Grosso do Sul São Paulo Alagoas Sergipe Tocantins Rondônia Cattle Herd (heads) Paraíba Pernambuco Rio de Janeiro Paraná Santa Catarina Rio Grande do Sul Source: IBGE / LAPIG - Prepared by ABIEC Brazilian Livestock Profile 25

24 Map 2 PASTURE DISTRIBUTION IN BRAZIL Roraima Amapá Amazonas Pará Maranhão Ceará Rio Grande do Norte Acre Rondônia Tocantins Piauí Paraíba Pernambuco Alagoas Sergipe Mato Grosso Bahia Goiás Mato Grosso do Sul Minas Gerais Espirito Santo State Borders Pasture area Paraná São Paulo Santa Catarina Rio de Janeiro Rio Grande do Sul Fonte: IBGE / LAPIG - Elaboração ABIEC 26 Brazilian Livestock Profile

25 Graph 8 PRODUCTION COST IN FULL CYCLE FARMS FOR SIX TECHNOLOGIES LEVELS - FULL CYCLE AVERAGE Full cycle - R$/@ RESULTS COMPONENTS Extrativism Low tech 3-6@/ha Medium tech 6-12@/ha Proper 12-18@/ha High tech 18-26@/ha Intensive 26-38@/ha Feed Health program Correctives and fertilizers Agrochemicals Fuels and lubricants Replenishment Employees Maintenance Management Eletric power Depreciation Total operating costs Source: Athenagro PRODUCTION COST IN FULL CYCLE FARMS FOR SIX TECHNOLOGIES LEVELS - FULL CYCLE AVERAGE DEPRECIATION ELECTRIC POWER MANAGEMENT MAINTENANCE EMPLOYEES REPLENISHMENT FUEL AND LUBRIFICANT AGROCHEMICALS CORRECTIVE AND FERTILIZER HEALTH PROGRAM FEED Source: Athenagro Brazilian Livestock Profile 27

26 Graph 9 PRODUCTION COST IN BREEDING FARMS FOR SIX TECHNOLOGIES LEVELS - BREEDING AVERAGE Breeding - R$/@ RESULTS COMPONENTS Extrativism Low tech 3-6@/ha Medium tech 6-12@/ha Proper 12-18@/ha High tech 18-26@/ha Intensive 26-38@/ha Feed Health program Correctives and fertilizers Agrochemicals Fuels and lubricants Replenishment Employees Maintenance Management Eletric power Depreciation Total operating costs Source: Athenagro PRODUCTION COST IN BREEDING FARMS FOR SIX TECHNOLOGIES LEVELS - BREEDING AVERAGE DEPRECIATION ELECTRIC POWER MANAGEMENT MAINTENANCE EMPLOYEES REPLENISHMENT FUEL AND LUBRIFICANT AGROCHEMICAL CORRECTIVE AND FERTILIZER PHEALTH PROGRAM FEED Source: Athenagro 28 Brazilian Livestock Profile

27 Graph 10 PRODUCTION COST IN REARING AND FINISHING FARMS FOR SIX TECHNOLOGIES LEVELS - REARING AND FINISHING AVERAGE Rearing and finishing - R$/@ RESULTS COMPONENTS Extrativism Low tech 3-6@/ha Medium tech 6-12@/ha Proper 12-18@/ha High tech 18-26@/ha Intensive 26-38@/ha Feed Health program Correctives and fertilizers Agrochemicals Fuels and lubricants Replenishment Employees Maintenance Management Eletric power Depreciation Total operating costs Source: Athenagro PRODUCTION COST IN REARING AND FINISHING FARMS FOR SIX TECHNOLOGIES LEVELS REARING AND FINISHING AVERAGE DEPRECIATION ELECTRIC POWER MANAGEMENT MAINTENANCE EMPLOYEES REPLENISHMENT FUEL AND LUBRIFICANT AGROCHEMICALS CORRECTIVE AND FERTILIZER HEALTH PROGRAM FEED Source: Athenagro Brazilian Livestock Profile 29

28 4 Livestock Farming Worldwide Table 6 LARGEST HERDS AND BEEF PRODUCERS IN THE WORLD IN 2017 COUNTRY CATTLE ((MILLION HEADS) BUBALUS (MILLION HEADS) TOTAL (MILLION HEADS) WORLD % BEEF PRODUCTION* (1000 T CWE) WORLD % Brazil % % India % % China % % USA % % Ethiopia % % Argentina % % Pakistan % % Mexico % % Australia % % Tanzania % % European Union % % Others % % world 1, , % % Source: Athenagro, USDA, FAO *Beef production includes bubalus meat Graph 11 DEVELOPMENT OF CATTLE AND BUBALUS MEAT PRODUCTION BETWEEN 2007 AND THOUSAND T CWE* China Turkey India Paquistan Egypt Mexico United States of America South Africa Australia United Kingdom France Germany Canada Russia Italy Argentina European Union Brazil European Union gathers 28 countries Source: Athenagro, FAO, USDA, OCDE * Preliminary 30 Brazilian Livestock Profile

29 The Brazilian herd is the largest in the world. Table 7 LARGEST BEEF EXPORTERS IN 2017 Country Exports (thousand T CWE)* Exports/Production (%) Production (thousand T CWE) Brazil 2, % 9,708.2 India 1, % 2,881.7 Australia 1, % 2,087.9 USA 1, % 12,076.4 New Zealand % Uruguay % Canada % 1,174.7 Germany % 1,116.4 European Union** % 7,350.8 Argentina % 2,732.9 Others 3, % 27,209.7 World 12, % 67,534.6 * bubalus and beef ** extra-block exports Source: FAO, USDA, Athenagro Perfil da Pecuária no Brasil 31

30 Table 8 LARGEST IMPORTERS WORLDWIDE AND BRAZIL S REPRESENTATION IN THOSE MARKETS IN 2017 Country Total Imports (1000 T CWE) Imports from Brazil (1000 T CWE) % BR USA 1, % Vietnam 1, % China % Japan % South Korea % Italy % United Kingdom % Russia % Netherlands % Germany % France % Bangladesh % Chile % Egypt % Canada % Hong Kong % Malaysia % Others 3, % World 12, , % European Union 2, % Source: OECD, USDA, Athenagro Graph 12 DEVELOPMENT OF CATTLE AND BUBALUS MEAT EXPORTS BETWEEN 2007 AND THOUSAND T CWE Brazil Argentina Ireland France Germany Italy Canada Belgium Uruguay Netherlands New Zealand Australia Paraguay Poland Mexico European Union USA India Source: Athenagro, FAO, USDA, OCDE 32 Brazilian Livestock Profile

31 Table 9 LARGEST BEEF CONSUMERS IN 2017 Ranking Total beef consumption (1000 T CWE) Consumption per capita (kg/person/year) Population (millions) USA 12, China 7, ,388.3 Brazil 7, Argentina 2, Russia 1, Mexico 1, Pakistan 1, France 1, Egypt 1, India 1, ,326.9 Japan 1, United Kingdom 1, Italy 1, Turkey 1, Germany 1, South Africa Canada Vietnam South Korea Uzbekistan Chile Netherlands Iran Saudi Arabia Hong Kong United Arab Emirates Uruguay Others 17, ,608.2 World 69, ,385.3 Source: FAO. USDA, FMI, Athenagro Brazilian Livestock Profile 33

32 5 Industry Map 3 Roraima Amapá ACTIVE SIF MEATPACKING INDUSTRIES LOCATION IN 2017 Amazonas Pará Maranhão Ceará Rio Grande do Norte Acre Rondônia Tocantins Piauí Paraíba Pernambuco Alagoas Sergipe State Borders Active Meatpacking Plants Mato Grosso Mato Grosso do Sul Goiás Bahia Minas Gerais Espirito Santo São Paulo Rio de Janeiro Paraná Santa Catarina Rio Grande do Sul Source: ABIEC Graph 13 SLAUGHTER BY CATEGORY OF INSPECTION % million heads Others 21% SIF 58.71% 23.0 SIE 15.26% 6.0 SIM 5.29% 2.1 Others 20.74% 8.1 SIM 5% Total % SIE 15% SIF 59% *Estimated value Sources: IBGE, Athenagro 34 Brazilian Livestock Profile

33 Brazilian Livestock Profile 35

34 6 Brazilian exports Table 10 EXPORTS, IMPORTS AND TOTAL BALANCES Net exports Sector US$ billion Exports US$ billion Imports US$ billion Balance Others sectors Agribusiness Brazil total Source: Athenagro. MAPA, Secex/MDIC Table 11 BEEF EXPORTS IMPORTANCE IN BRAZIL S TOTAL EXPORTS AND AGRIBUSINESS EXPORTS IN 2017 Agribusiness exportation 2017 Million US$ 1000 Tonnes %/US$ Meat 15, , % Chicken meat 7, , % in natura 6, , % processed % Beef 6, , % in natura 5, , % processed % Pork 1, % in natura 1, % Turkey meat % in natura % processed % Leather and other goods 2, % Other livestock products % Live animals % Live cattle % Fish % Dairy products % Total livestock farming exports 18, , % Total other sectors (excluding cattle products) 76, % Total other sectors (excluding livestock farming) 66, % Total agribusiness exports 84, % Meat 18.22% Leather and other goods 2.78% Other livestock products 0.43% Total other sectors (excluding livestock farming) 78.16% Beef 7.15% Leather and other goods 2.78% Live Cattle 0.33% Total other sectors (excluding cattle products) 89.75% Source: Athenagro, MAPA, Secex/MDIC, AgroStat 36 Brazilian Livestock Profile

35 Table 12 BRAZILIAN BEEF EXPORTS PER PRODUCT AND 2017 CATEGORY US$ US$ Variation US$ (%) 2016 T 2017 T Variation T (%) 2016 US$/t 2017 US$/t Variation medium price (%) In natura 4,349, ,086, % 1,077, ,210, % 4, , % Offals 496, , % 195, , % 2, , % Processed 600, , % 105, , % 5, , % Casings 49, , % 18, , % 2, , % Salted 19, , % 3, , % 6, , % Total 5,515, ,284, % 1,400, ,534, % 3, , % Source: MIDC / SECEX Prepared by ABIEC Graph 14 BRAZILIAN BEEF EXPORTS REPRESENTATIVENESS Beef 3% Total agribusiness exports 46% Other sectors 54% Mi US$ % Brazil total exports 185, % Other sectors total exports 100, % Total agribusiness exports 84, % Beef 6, % Source: Athenagro, MAPA, Secex/MDIC, AgroStat Brazilian Livestock Profile 37

36 Graph 15 BRAZILIAN BEEF EXPORTS 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 Revenue (Thousand US$ ) TONNES (US$/T) 3, , , , , , , , , ,463 2, , ,268 2, , ,573 2, , ,264 2, ,699 1,062,765 1, ,639 1,153,440 1, ,496 1,598,490 1, ,429 2,535,619 2, ,184,295 3,074,317 2, ,358,679 3,943,417 2, ,526,941 4,456,213 2, ,618,460 5,413,459 1,386,661 4,155,840 3, ,246,501 4,825,845 1,232,631 5,378,585 1,097,947 5,772,025 1,244,735 6,711,196 1,512,587 7,250,084 1,574,926 5,938,921 1,399,259 5,515,954 1,400,485 6,284,789 1,534, ,000 5,000 4,000 3,000 2,000 1,000 0 Source: MDIC / SECEX - Prepared by Abiec Graph 16 MAIN DESTINATION OF BRAZILIAN BEEF EXPORTS IN BY REVENUE (THOUSAND US$) 11% Country Revenue (thousand US$) Hong Kong 1,528, China 939, European Union 712, Iran 559, Egypt 529, % 3% 4% 5% 24% Russia 487, USA 295, Chile 281, Saudi Arabia 168, % 15% United Arab Emirates 96, Others 686, % Source: MDIC / SECEX - Prepared by ABIEC 9% 11% 38 Brazilian Livestock Profile

37 Graph 17 MAIN DESTINATION OF BRAZILIAN BEEF EXPORTS IN BY VOLUME (TONNES) Country Volume (T) Hong Kong 406, China 213, Egypt 153, Russia 151, Iran 133, % 3% 3% 4% 13% 26% European Union 109, Chile 64, Saudi Arabia 42, USA 39, United Arab Emirates 22, Others 197, % 9% 14% Source: MDIC / SECEX - Prepared by ABIEC 10% 10% Map 4 BRAZILIAN BEEF BUYING MARKETS (T CWE) Brazilian Livestock Profile 39

38 Graph 18 e 19 LARGEST BRAZILIAN BEEF MARKETS IN THOUSAND US$ LARGEST BRAZILIAN BEEF MARKETS IN 2017 BY REVENUE 8,000,000 OTHERS 1000 US$ 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 EUROPEAN UNION ISRAEL SAUDI ARABIA CHINA CHILE USA VENEZUELA IRAN EGYPT 0 HONG KONG Source: MDIC / SECEX - Prepared by ABIEC % LARGEST BRAZILIAN BEEF MARKETS IN % 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% RUSSIA HONG KONG EGYPT IRAN VENEZUELA USA CHILE CHINA SAUDI ARABIA ISRAEL EUROPEAN UNION Source: MDIC / SECEX - Prepared by ABIEC 40 Brazilian Livestock Profile

39 Graph 20 e 21 LARGEST BRAZILIAN BEEF MARKETS IN 2017, BY VOLUME LARGEST BRAZILIAN BEEF MARKETS IN 2017, BY VOLUME 1000 ton Beef 1,800,000 1,600,000 1,400,000 1,200,000 1,000, , , , ,000 0 OTHER EUROPEAN UNION ISRAEL SAUDI ARABIA CHINA CHILE USA VENEZUELA IRAN EGYPT HONG KONG RUSSIA Source: MDIC / SECEX - Prepared by ABIEC LARGEST BRAZILIAN BEEF MARKETS IN % RUSSIA HONG KONG EGYPT IRAN VENEZUELA USA CHILE CHINA SAUDI ARABIA ISRAEL EUROPEAN UNION OTHERS 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Source: MDIC / SECEX - Prepared by ABIEC Brazilian Livestock Profile 41

40 7 Livestock retrospective and projections Table 13 CATTLE HERD, BEEF PRODUCTION, EXPORTS, IMPORTS, COMSUMPTION, AND COMSUMPTION PER CAPITA IN THE LAST 10 YEARS Unit Herd Mi heads Beef production TT CWE 10,644 9,325 9,180 9,365 9,102 9,704 10,227 10,123 9,697 9,142 9,708 Exports TT CWE 2,324 1,998 1,771 1,708 1,501 1,692 2,021 2,097 1,882 1,882 2,032 Imports TT CWE Consumption TT CWE 8,352 7,359 7,450 7,697 7,646 8,072 8,263 8,103 7,874 7,324 7,733 Consumption per capita kg/heads/year Source: Athenagro, Secex/MDIC, IBGE Table 14 LIVESTOCK FARMING HISTORY DATA AND FORECASTS BY 2027 Variable Unit Total Herd Mi heads Production 1000 T CWE 5,922 7,537 10,644 9,704 9,756 11,850 12,169 Export 1000 T CWE ,324 1,692 2,032 2,708 3,061 Import 1000 T CWE Domestic comsumption 1000 T CWE 5,612 6,626 8,352 8,072 7,733 9,205 9,168 Per capita availability carcass kg /person/year Beef consumption beef kg /person/year Slaughter 1000 heads 26,432 31,955 46,378 41,077 39,201 46,618 46,605 Pasture area 1000 ha 186, , , , , , ,397 Stocking rate heads/ha Occupation rate animal unit/ha Carcass average weight kg/head slaughtered Offtake Percentage 16% 17% 23% 19% 18% 21% 21% Source: Athenagro, IBGE, Secex/MDIC 42 Brazilian Livestock Profile

41 Brazilian Livestock Profile 43

42 8 Sustainability BRAZIL S LAND USE Total Area (million ha) Pastures in working conditions % % Pastures at advanced stage of degradation 6.1 1% Agriculture (annual, forests, semiperennial and perennial) % Cities, roads, water courses and other uses 38 4% Native forest regeneration (Amazon biome) % Legal reserves and Permanent Protection areas (APPs) % Untouched wilderness % Brazil % Untouched wilderness 51% Native forest regeneration (Amazon biome) 3% Agriculture (annual, forests, semiperennial and perennial) 9% Legal reserves and Permanent Protection areas (APPs) 13% Pastures at advanced stage of degradation 1% Cities, roads, water courses and other uses 4% Pastures in working conditions 19% Source: Athenagro, Agrosatélite, IBGE, INFE, MAPA 44 Brazilian Livestock Profile

43 Graph 22 DEVELOPMENT OF PASTURE AREAS AND YIELD IN BRAZIL 200 Evolution of the pasture area vs productivity MILLION HA PASTURE AREA (MILLION HA) YIELD (@/HA/YEAR) Source: Athenagro, dados IBGE, Lapig, Terraclass, Agrosatélite, Prodes, Map Biomas Forest Code Legal Reserve (RL) The rural property that, covered by natural vegetation, can be exploited for sustainable forest management, within the limits established by law for the biome in which it is located. - 80% of property in the Legal Amazon - 35% on properties located in the Savanna formations in the Legal Amazon - 20% on properties located in forest area - 20% on properties located in the Campos Gerais area Brazilian Livestock Profile 45

44 Permanent Preservation Area (APP) Untouchable natural areas, with strict limits on exploitation; in other words, direct economic exploitation is not allowed. - Protection of river banks (30 to 500 meters) - Protection of lakes (30 to 100 meters) - Springs (50 meters) - Hills with an incline of over 45 - Others Envirommental Regulation Program (PRA) and Rural Envirommental Registry (CAR) Environmental Regulation Program (PRA): a set of actions to be developed by rural landowners and squatters to adapt and promote environmental compliance. Rural Environmental Registry (CAR): a set of geo-referenced property information, with division of APPs, RLs, remnants of native vegetation and other information, used to draw a digital map from which the values of the areas undergoing environmental diagnosis are calculated. Deforestation and monitoring Graph 23 ANNUAL DEFORESTATION RATES IN THE LEGAL AMAZON IN HECTARES 30 2,539,600 2,777, ,822,600 1,816, ,901,400 1,428, ,165,100 1,291, , , , , , , , , * ,400 Source: PRODES/Instituto Nacional de Pesquisas Espaciais *estimated rate 46 Brazilian Livestock Profile

45 GTPS Within a Roundtable format, the GTPS (Brazilian Roundtable on Sustainable Livestock) is an organization that covers every link in the beef value chain and promotes sustainable livestock development through articulation of the chain, continued improvement and dissemination of information. The Group debates and formulates principles, standards and common practices for the development of sustainable beef production. The GTPS sees sustainability as an evolving process. The GTPS is committed to zero deforestation, dependent upon the creation of mechanisms for economic compensation so that this practice is made viable. GTPS Members - Producers - Industries - Retail and services industry companies - Financial institutions - NGO s GTPS Pillars - Continuous improvement of sustainability - Transparency and ethics - Best practices in agricultural and livestock production - Legal compliance Brazilian Livestock Profile 47

46 9 Health History of the evolution of the status of foot-and-mouth disease in Brazil The states of Rio Grande do Sul and Santa Catarina are recognized as the first Foot-and-Mouth Disease Free Zone with vaccination - Reintroduction of foot-and-mouth disease in the state of Rio Grande do Sul, with suspension of the status of foot-and-mouth disease free zone with vaccination for the said state and Santa Catarina - Recognition of foot-and-mouth disease free zone with vaccination for the state of Paraná and Federal District, and parts of the states of Goiás, Mato Grosso, Minas Gerais and São Paulo Expansion of the foot-and-mouth disease free zone with vaccination, with recognition of the states of Bahia, Espírito Santo, Mato Grosso do Sul, Rio de Janeiro, Sergipe, Tocantins and parts of Goiás, Mato Grosso, Minas Gerais and São Paulo Reinstatement of foot-and-mouth disease free zone with vaccination status for the states of Rio Grande do Sul and Santa Catarina Expansion of the foot-and-mouth disease free zone with vaccination, with recognition of the state of Rondônia Recognition of the state of Santa Catarina as a foot-and-mouth disease free zone without vaccination and the center-south region of the state of Pará as a foot-and-mouth disease free zone with vaccination - MAY: Reinstatement of the recognition of foot-and-mouth disease free zone for the states of Bahia, Federal District, Espírito Santo, Goiás, Mato Grosso, Minas Gerais, Paraná, Rio de Janeiro, São Paulo, Sergipe and Tocantins. - JULY: Reinstatement of the recognition of foot-and-mouth disease free zone for the State of Mato Grosso do Sul -Reestablishment of the full area suspended in Reinstatement of the recognition of foot-and-mouth disease free zone with vaccination status in the High-Vigilance Zone of the state of Mato Grosso do Sul - February Recognition of the protection zones of Bahia and Tocantins as foot-and-mouth disease free with vaccination and expansion of the foot-and-mouth disease free zone with vaccination of Rondônia and Amazonas - May Recognition of the states of Alagoas, Ceará, Maranhão, Paraíba, Pernambuco, Piauí, Rio Grande do Norte and the northern region of the state of Pará as being foot-and-mouth disease free zone with vaccination, being incorporated into the free zone already consolidated in the country - May 2014 Recognition by the OIE of Brazil as a country free of foot-and-mouth disease with vaccination infected zone foot-and-mouth disease free zone with vaccination - recognized by the OIE buffer zone / protection zone foot-and-mouth disease free zone without vaccination - recognized by the OIE free zone with recognition suspended Table 16 MEMBER COUNTRIES KNOWN TO POSE A NEGLIGIBLE RISK OF BSE ACCORDING TO CHAPTER 11.4 OF THE LAND CODE Australia Austria Belgium Brazil Bulgaria Chile Colombia Costa Rica Croatia Cyprus Czech Republic Denmark Estonia Finland Germany Hungary Iceland India Israel Italy Japan Korea (Rep. of) Latvia Liechtenstein Lithuania Luxembourg Malta Mexico Namibia New Zealand Norway Panama Paraguay Peru Poland Portugal Romania Singapore Slovakia Slovenia Spain Sweden Switzerland The Netherlands United States of America Uruguay 48 Brazilian Livestock Profile

47 Brazilian Livestock Profile 49