The combination of extremely tight beef supplies in the US, with the national cattle herd size sliding to the lowest levels since 1951 and new estimates of declining beef production in agricultural juggernaut Brazil, points to elevated burger prices for the foreseeable future, yet more bad news for cash-strapped consumers struggling with rampant food inflation.
Bloomberg cited consulting firm Datagro analyst Joao Otavio Figueiredo’s presentation at a conference in Sao Paulo this week, which noted Brazil’s cattle availability is expected to decline as early as next year. This essentially means the cost of producing beef will rise, straining global supplies of red meat at a time when the South American country has ramped up exports of beef to the US.
Figueiredo expects Brazil’s animal slaughter rates to fall 4.6% next year and 7.5% in 2026. This means that years of expanding beef production capacity in South America are ending abruptly. This is happening at a time when US companies are turning to Brazil for beef supplies to counter extremely tight domestic supplies, the lowest since 1951.
“The reduction in the Brazilian cattle herd comes when beef production is already constrained by a severe shortage of slaughter-weight animals in the US, which has eroded profits for processors such as Tyson Foods Inc. and Cargill Inc. That is unwelcome news for JBS SA, Marfrig Global Foods SA and Minerva SA, which rely on Brazilian cattle for a sizable share of their beef output,” Bloomberg noted.
Notice how US meat imports from Brazil have ramped up in the last several years.
Data from Statista shows that in 2022 , the imports of beef from Canada and Mexico to the US were 51%, while Brazil was in the number three spot with 14%.
No one is coming to the rescue to save the rapidly deteriorating US beef cattle herd.
Retail ground beef prices at the supermarket continue marching higher.
According to VP Harris, the solution to rising beef and food prices is communist price controls…
We don’t expect a meaningful rebound in the nation’s beef cattle supply until at least 2026. It will take years.
Maybe the Fed can print more beef? Oh wait, no, but you know who can: Bill Gates.
Tyler Durden
Thu, 09/12/2024 – 18:00
