Brazilian beef market domestic vs. export

Transcription

1 Brazilian beef market domestic vs. export Sergio De Zen, PhD Mariane C. dos Santos Center for Advanced Studies on Apllied Economics University of São Paulo 19/6/2013

2 Domestic 19/6/2013

3 % Cattle importance in Brazil Employees on the farm families 2 million of people; US$ 4,5 billion in export. Cattle participation in GDP (%) 7,8 7,6 7,4 7,2 7 6,8 6,6 6,4 6,2 6 5, % Source: Cepea/IBGE

4 Macroeconomics perspectives Market in 2013 Economy growth (% GDP) Consumption (million of tons) 1000 cattles 1000 cows Surplus % 2% % ,7% 4% ,6% Source: Cepea

5 mar/04 jul/04 nov/04 mar/05 jul/05 nov/05 mar/06 jul/06 nov/06 mar/07 jul/07 nov/07 mar/08 jul/08 nov/08 mar/09 jul/09 nov/09 mar/10 jul/10 nov/10 mar/11 jul/11 nov/11 mar/12 jul/12 nov/12 mar/13 5,00 Brazilian Animal Prices US$/kg live Mar/2004 to apr/2013 4,50 4,00 3,50 3,00 2,50 2,00 1,50 1,00 0,50 0,00 Cattle Pig Chicken Source: Cepea

6 kg Brazilian consumption kg per capita/year % +11% % % Chicken Beef Pork Fish Source: Abiec, Abef, Abipecs, Mapa

7 Meat Brazilian Family Expense Billions US$ 24,1 22,5 20,7 19,6 25,6 22,2 15,6 13,1 10,7 8,5 8,5 9,3 12, Source: POF/IBGE

8 Exports

9 Cattle Prices in WORLD Uruguai Brasil Austrália Paraguai USA Source: CEPEA, SAGPYA, INAC, MLA and USDA

10 HONG KONG 18% Brazilian Exports Beef (Tonnes) EGYPT 11% VENEZUELA 7% IRAN 5% CHILE 6% UK 3% SAUDI ARABIA 3% Total Exports/Tonnes 2012: : % RUSSIA 21% OTHERS 26% 153 Countries Source: SECEX-MDIC

11 Productivity Improvement 19/6/2013

12 Brazil s Feedlot Source: Assocon

13 Feedlot Slaughter/TOTAL 2012 Total ~25% Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Source: Assocon

14 Production Intensification PASTURE INTENSIFICATION, AGROPASTORAL AND AGROSILVOPASTORAL SYSTEMS Typical Farm Nova Andradina MS Growing and fattening production Initial-P PI API ASPI Post weaning mortality rate (%) 5.00% 3.00% 3.00% 3.00% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1800 ha List of Areas 540 ha 1260 ha 900 ha 900 ha 324 ha 738 ha 738 ha 480 ha 480 ha 480 ha 480 ha 120 ha 120 ha 120 ha 120 ha Initial P PI API ASPI > Production technology Betterment areas Non-intensified perennial pasture Annual pasture area Forest area Source: Cepea Reserve area Intensified perennial pasture Crop area Agri Benchmark June 2009 Slaughter rate 33.51% 48.91% 48.91% 48.91% Stocking rate in pasture area - AU/ha Stocking rate in total area - AU/ha Average daily weight gain gr/head/day Annual Effective Cattle Herd (heads) Initial P PI API ASPI Initial-P PI API ASPI Middle West Mato Grosso do Sul

15 R$ Million 40 R$3500 R$3000 R$2500 R$2000 R$1500 R$1000 R$500 R$- R$ Production Intensification PASTURE INTENSIFICATION, AGROPASTORAL AND AGROSILVOPASTORAL Economic Results R$1, Income - R$/ha R$ R$2, R$1, R$3, Initial-P PI API ASPI R$3, R$2, Others TC Land Opportunity TC TOC EOC Income Financial Results (22 years) Cumulative Gross Margin - Comparative SYSTEMS R$ 3 R$ 2 R$ 1 R$ 0 -R$ 1 -R$ 2 25% 20% Return on Investment (ROI) P - Inicial IP ILP ILPF R$ (1.58) R$ 0.52 R$ 1.96 Internal Rate of Return (IRR) 22.18% R$ % Initial-P PI API ASPI Source: Cepea 15% 10% 5% 0% 8.73% Initial-P PI API ASPI

16 Brazilian Environmental Laws Biome Legal Reserve (%) - Amazon : 80% - Cerrado: 30% - Others: 20% 37% Herd Amazon biome Cerrado biome Others biomes Agri Benchmark June 2009 Permanent Protection Areas (PPA): around water resources, on top of hills, on hillsides with high slopes, in reproduction refuges of animals in risk of extinction, etc.. It is not allowed to manage areas under this classification Legal Reserve (LR): In accordance with the biome, it is a percentage of the total area of the property that must be maintained as forest reserve. Sustainable management can be realized.

17 Brazilian Environmental Laws Biome Legal Reserve (%) - Amazon : 80% - Cerrado: 30% - Others: 20% 37% Herd Amazon biome Cerrado biome Others biomes Agri Benchmark June 2009 Permanent Protection Areas (PPA): around water resources, on top How of hills, a on rural hillsides with high slopes, in reproduction property can be refuges of animals in risk of extinction, economically etc.. It is not allowed to manage areas under this classification viable with 80% of its total area allocated as legal Legal Reserve (LR): In accordance with the biome, it is a percentage of the total area of the reserve? property that must be maintained as forest reserve. Sustainable management can be realized.

18 Total Herd Pará: 18,2 million Paragominas: 292, 5 thousands Brazilian Environmental Laws Opportunities Case of Study Area and Herd information Improvements Area Legal Reserve Area Real Scenario Maraba LR Scenario Marabá Marabá: 675 thousands this value is 2,5 higher. Source: Cepea Real Scenario Paragominas LR Scenario Paragominas 90 ha 90 ha 5 ha 5 ha 900 ha 1500 ha 250 ha 500 ha Pasture Area 2010 ha 1410 ha 745 ha 495 ha Total Area 3000 ha 3000 ha 1000 ha 1000 ha Herd (head) The loss in herd size was compensated by wood selling revenues. The return to R$ invested in Paragominas is 1,7 higher with the management of LR. In Marabá

19 Industries 19/6/2013

20 Participation of the Brazilian Government in Billions US$ and stocks COMPANIE GOVERNMENT (%) INVESTOR NUMBER OF STOCKS VALUE (US$/stock) TOTAL (US$) JBS BRFOODS 20% BNDESPAR ,52 R$ % Caixa ,52 R$ % Previ - BB ,09 R$ % Petros ,09 R$ MARFRIG 20% BNDES ,81 R$ Source: JBS, MARFRIG, BRFOODS

21 Net sales value in US$ mil US$2.241 US$ US$ MINERVA MARFRIG JBS Source: JBS, MINERVA and MARFRIG

22 Challenges

23 Brazilian Unemployment Rate (%) 14,0 12,0 10,0 8,0 6,0 4,0 2,0 0, Source: IBGE

24 Inflation IPCA (%) Source: IBGE Projection Bacen 2013 (5,67%)

25 Direct Investments in Brazil (US$ million) Source: IPEA/Bacen

26 OBRIGADO!