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BRAZIL SOUTH AMERICA

BRAZIL SOUTH AMERICA. Group 2: Balazs, Bilal, Diana, Gao, Karla. BRAZIL’S INTRODUCTION. Largest South American country 5 th largest population worldwide ( 191million people ) Area: 8.5millionkm 2 (Consisting of 47 % of area of the continent) 9 th largest economy in world.

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BRAZIL SOUTH AMERICA

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  1. BRAZIL SOUTH AMERICA Group 2: Balazs, Bilal, Diana, Gao, Karla

  2. BRAZIL’S INTRODUCTION • Largest South American country • 5thlargest population worldwide (191million people) • Area: 8.5millionkm2 (Consisting of 47% of area of the continent) • 9th largest economy in world

  3. BRAZIL’S INTRODUCTION • 12% of fresh water in the planet • 23% of population work in agri-business • Relatively low prices of land and labor • No extreme weather, no deserts

  4. IMPORTANT FACTS ABOUT BEEF PRODUCTION • Largest commercial beef herd worldwide • 2nd largest producer of the beef globally, producing 9.7 million tones Carcass Weigh Equivalent • Exports beef to 180 different countries, without any subsidies from government

  5. In the international meat trade market, for each 10kg of beef trade, 3kg come from Brazil • Biggest beef consumer globally • Low cost of beef production, 60% lower than Australia, 50% lower than USA

  6. Roughly 150 million animals used for beef production • Uses 140 million hectares of land • 6.8 million direct or indirect employees • Pasture system is used for feeding animals • No. of beef processing plants and abattoirs are 750

  7. PILLARS OF BRAZILIAN BEEF PRODUCTION Two imported components: • Zebu Cattle • Originated from the Indian Subcontinent • Tropical grasses • Originated from Africa

  8. BEEF FARMS • 1.8 million farms • Small size farms produce: • < 500 heads/year • Medium size farms produce: • >1000 heads/year • Commercial Farms produce: • >4000 heads/year

  9. CROSS BREEDING • Crossing Breeding used in all regions of the country • European breeds used for cross breeding: • Angus • Red Angus • Simmental • Charolais • Polled Hereford • Limousin • Braunvieh

  10. POPULAR BEEF BREEDS

  11. NELLORE

  12. GYR

  13. GUZERAT

  14. WORLD BEEF HERD SIZES

  15. DISTRIBUTION OF BRAZILIAN BEEF HERDS

  16. Herd 208 millions of cattleheads Grazingarea: 172 millions Ha Density: 1.2 animals/Ha Offtakerate: 18.9% Export of liveanimals 404 853 Importliveanimals 5.262 Export 16.5% 1.5 millions T. Culling/year 39.5 millions Carcase mean weight: 233 Kg Industrialised 260 000 T 17% In Natura 1.1 million T 71% Offal/others 173000 T 11% MeatProduction 9.1 millions T. Carcaseyield (Nelore) 51-55% 87 countries 62 countries 108 countries Finishedanimals in Feedlots 3.4 millions (8.6% of culling) Internalmarket (83.5%) 7.6 millions T. 40 Kg./yearper capita Russia 28% Iran 16% Egypt 12% Others 44% Hong Kong: 66% Russia: 5% Others: 29% EU 27: 53% USA: 12% Others: 35%

  17. EXPORTS • 20% world’s beef export. • 2006: Europe banned the use of antibiotics in animal production  Brazilian packing plants regulated their use (ionophores used as growth promoters) • Implants or beta-agonists are forbidden • 27 Brazilian states: only 16 are considered foot-mouth disease-free areas, and 15 of them are only free with vaccination

  18. ARGENTINA 53 Million heads Mostly europeanbreeds - Criollo Exports: average 20% (Currently 7%) Production systems: • Cow-calf operations: extensive grazing systems • Finishing: 90 days feedlots or semi intensive on pasture with supplementary feeding.

  19. GHG PRODUCTION CO2 and N2O Amazon deforestation…

  20. GHG PRODUCTION • In the last 20 years Brazil showed the greatest growth rates in annual methane emission estimates (2.12%/year) • Brazil showed the greatest growth rate of beef production (4.01%/year). • Brazil: (−1.82%/year) of net increase in rate of methane emissions per unit of product (kilograms of methane/kilogram of beef)

  21. LAND USE – GRAZING • Brazilian beef operations are mostly based on perennial tropical grass graying systems. • The production cycle conducted exclusively on grazing systems with only mineral supplementation during the dry season leads to older animals at market. This productions cycle from birth to market averages 36 months.

  22. LAND USE – GRAZING • Grazing combined with stocker phase (concentrate supplementation) or feedlot operations during the dry season (winter) in the recent decade. • Birth: end of winter / beginning of spring • Weaning: beginning of fall, calfs are avg. of 7 month old.

  23. TRENDS OF PASTURE LAND USE • 1970 • 78.6 million cattle • 124.4 million ha pasture /NATURAL/ 0.51 anim/ha • 29.7 million ha pasture /CULTIVATED/ • 2006 • 171.6 million cattle • 57.3 million ha pasture /NATURAL/ 1.08 anim/ha • 101.4 million ha pasture /CULTIVATED/ • - 67.1 m ha natural pasture • + 71.7 m ha cultivated pasture INCREASED PASTURE EFFICENCY

  24. Millen 2011, Current outlook and future perspectives of beef production in Brazil

  25. BRAZIL CHALLENGES/ LIMITATIONS FOR BEEF PRODUCTION

  26. BRAZIL - Challenges/ Limitations for Beef Production • 1.Maintaining/Increasing Production on reduced pastureland. • The recently overhauled “Forest Act” (2012) -force farmers to replant trees on illegally cleared areas (80% of rural properties in the Amazon should be covered by forests). -Farmers will be limited from expansion • Expansion of cashcrop production (soybean) - has increased land prices - forced cattle production to move to the North

  27. 2. MAINTAINING CURRENT GROWTH - While there is potential for further increase in productivity, the industry is heterogenous, uncoordinated and strategically not well-defined. • Overcoming lack of infrastructure - roads railways, processing plants to comply with international standards • Manage public perception about of deforesting the Amazon to create grazing for cattle; GGE • Controlling greenhouse gas emissions

  28. 3. GAINING MARKET ACCESS AND KEEPING THE COUNTRY A LEADER IN THE MARKET • Delivering a traceable product -requires huge investment. -Control systems susceptible to bribery. It is possible for tags to be removed and cattle to move without documentation. -Address potential for abuse in biosecurity and disease control. • Manage the dynamic, aggressive global market -Competition for market share will increase from Argentina, Australia with similar production systems. • Overvaluation of the Brazilian Real, (1,7:1) with US Dollar – - This has directly reduced the competitiveness of Brazil's low value commodity exports.

  29. 3. GAINING MARKET ACCESS AND KEEPING THE COUNTRY A LEADER IN THE MARKET • Managing breeding programmes - Increased resistance from producers to changes in herd genetics causing ''backyard'' deals. • Improving quality of product -Currently producing lower value, slower growing and poor muscle grass- fed beef cattle. -Brazil is a top producer in terms of quantity , not quality • YET; ''The future portends market segmentation of meat demand based on quality attributes.''

  30. ARGENTINA • Future is uncertain: continuous government intervention in order to provide for domestic market and control inflation. • Global share of exports will not increase in the short term because of government's objective to control inflation. CHALLENGES - Gaining market access - Their image as a reliable supplier has been damaged. -Increasing cow- calf herd which was reduced in the past years. - Beef cattle production on less land- More land is being used for grain and oilseed production. • Increasing investment especially to expand capacity to take advantage of the current economic environment. • High export taxes – Government has removed rebates on exports.

  31. A PERSPECTIVE FOR BEEF PRODUCTION IN ARGENTINA Production will increase as intensification increases. Is not expected to increase its global share of exports because of government's goal to reduce inflation – (15% tax on all exports to lower prices in domestic market). It is possible to take advantage of; 1. The current decline in beef production in the EU. 2. Increase in demand in the EU as there is a rebound from the BSE crisis. 3.Increasing demand from Russia as World oil prices are increasing. 4.FMD outbreak in Brazil. 5. Use corn feeding – highly productive cheap in Argentina 6. Trade liberalisation and elimination of farm domestic support policies- all Mercusor countries. 7. Currently high meat prices – Even if supply increases and prices fall Mercusor countries have low costs and will thrive than other countries.

  32. A PERSPECTIVE FOR BRAZIL BEEF INDUSTRY • Has potential to maintain dominance as one of the biggest beef exporters. • Will face stiff competition from mainly Australia which has similar production but supplies premium beef cuts to EU markets. • In the long term; • The current efforts may pay off; • (aggressive marketing,traceability system, favourable exchange rate, subsidised credit, infrastructure development, improvement in animal genetics, stable government) TO INCREASE PRODUCTION. • Herd sizes will increase – low production costs. • Brazil will benefit from trade liberalisation and removal of farm support schemes; will be able to deal with fluctuations in input costs. • Intensifed farming will increase as a response to land pressure.

  33. BRAZIL: FUTURE PERSPECTIVE • Herd sizes will increase – low production costs. • Intensifed farming will increase as a response to land pressure- produce relatively cheap feed . • Brazil will benefit from trade liberalisation and removal of farm support schemes; • Will be able to deal with fluctuations in input costs • Intensifed farming will increase as a response to land pressure- produce relatively cheap feed . • Diet will be more grain-based • Although feedlot numbers (currently 4%) will increase, they will continue to push the ''natural product'' as a marketing initiative. (Thompson, 2008) • Increases of production will be offset by consumption as income increases; Net surplus will decrease • .

  34. SUMMARY- CHALLENGES & LIKELY TRENDS

  35. SUMMARY-BRAZILIAN BEEF PRODUCTION SYSTEM Feeding Perennial tropical grass Grazing system or feedlot INCREASED PASTURE EFFICENCY Breeding Zebu cattle Cross breeding Large beef herd size Management Family holdings Low cost of beef production ABIEC(Brazilian Beef Processors and Exporters Association) • Economic sustainability • Large domestic consumption • World’s leading exporter • 2nd LARGEST PRODUCER Environmental sustainability Challenges of land use and deforestation GHG emission Beef quality Antibiotics Implants or beta-agonists BSE/FMD

  36. SUGGESTIONS • Feeding: • Development in Center-West region; • Pasture subdivision; • Recovery and maintenance of soil fertilization; • Feed supplementation for critical periods • Breeding : • Animal genetic improvement • Develop specialized pedigree herds • Management: • Sanitary control; • Adjustment of the genotype-environment • Keep traceability

  37. SUGGESTIONS • Quality • Achieve good feeding, breedingand management • Economic sustainability • Domestic: • develop infrastructure and publication • International: • Governmental subsidy and organizations’ investment • Build well traceability • Extend new market(Iran, Egypt) • Environmental sustainability • Produce more with less land • Utilize by-products: use the waste beef fat to make biodiesel • Develop regulations to control GHG and deforestation

  38. THANK YOU!

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