Meat Report Jan 2011 (Vfmc Novos Graficos)

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Meat Report Jan 2011 (Vfmc Novos Graficos)

  1. 1. Protein Market Review JAN 2011 Autor: Márcio Caparroz: marciocaparroz@terra.com.br
  2. 2. Market High LightsDrop in live cattle in Brazil in Nov/December;üBeef pick prices in Brazil for domestic and exports;üPositive scenario for Beef in Brazil in 2011;üChicken prices increases for local market in Brazil in 2°üsemester;ü Negative scenario for Chicken and Pork exports from Brazilsince Nov/December;Potential increase in USA Chicken exports prices.ü Autor: Márcio Caparroz: marciocaparroz@terra.com.br
  3. 3. Cattle Prices US$ /Kgü Cattle prices should remain within a higher range in the coming two to three yrs A combination of drought and a strong Real caused Brazilian cattle prices to peak in Oct/Nov’10 Source: Bloomberg, INAC, IPCVA, MLA, Autor: Márcio Caparroz: Note: Up dated Jan 14th marciocaparroz@terra.com.br
  4. 4. Domestic Beef Prices - Brazil and USA (US$/Kg)ü Brazilians paying higher prices for their beef Strong Domestic consumption in Brazil maintained meat prices in line with cattle costs Source: Bloomberg Autor: Márcio Caparroz: Note: Up dated Jan 14th marciocaparroz@terra.com.br
  5. 5. Brazil Beef Margin (US$/Kg )ü The increase in the value of “drop credit” (such as hides) compensated, in large part,ü for the negative margin live to carcass Source: Bloomberg Note: 10% discount in Live cattle prices referrers to casings, offals, hides and others Animal by Autor: Márcio Caparroz: products dated Jan 14th marciocaparroz@terra.com.br Note2: Up
  6. 6. USA Beef Marginü Drop credit offset negative live to carcass margin also in the US Source: Bloomberg Autor: Márcio Caparroz: Note: Up dated Jan 14th marciocaparroz@terra.com.br
  7. 7. Brazil Beef Exports Spread Average Price vs. Cattle - US$/Kgü International demand has supported price increase for exported items in line withinput cost hikes Source: Bloomberg, MDIC Autor: Márcio Caparroz: marciocaparroz@terra.com.br
  8. 8. USA Beef Exports Spread Average Price vs. Cattle - US$/Kgü Regardless of substantial increase in volumes exported, pricing power was sufficientto offset cattle price increase Source: Bloomberg, USDA Autor: Márcio Caparroz: Note: December exports are USDA Forecast marciocaparroz@terra.com.br
  9. 9. Chicken BR vs. USA (BASE 100) ü The US has become a very competitive production platform for chicken witch should enhance exports from there in 2011 A combination of robust domestic demand and strong Real resulted in much higher $ in BrazilSource: Bloomberg Autor: Márcio Caparroz: Note: Up dated Jan 14th marciocaparroz@terra.com.br
  10. 10. Commodities Overview (BASE 100) Inflation where more representative in oil and grains (Corn and Soy)Source: Bloomberg Autor: Márcio Caparroz:Note: Up dated Jan 14th marciocaparroz@terra.com.br
  11. 11. Protein Prices Evolution in Brazil (R$/Kg)Source: CEPEA Autor: Márcio Caparroz:Note: Up dated Jan 14th marciocaparroz@terra.com.br
  12. 12. Brazil Cattle and Beef prices evolution (US$/Kg)Source: Bloomberg Autor: Márcio Caparroz:Note: Up dated Jan 14th marciocaparroz@terra.com.br
  13. 13. Brazil Chicken Export Spread (US$/Kg)Source: CEPA, MDIC, Bloomberg Autor: Márcio Caparroz:Note: Up dated Jan 14th marciocaparroz@terra.com.br
  14. 14. USA Chicken Export Spread (US$/Kg)Source: CEPA, MDIC, Bloomberg Autor: Márcio Caparroz:Note: Up dated Jan 14th marciocaparroz@terra.com.br
  15. 15. Brazil Pork Export Spread (US$/Kg)Source: CEPEA, MDIC Autor: Márcio Caparroz:Note: Up dated Jan 14th marciocaparroz@terra.com.br

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