October 21, 2014

Brazil is planning to accelerate the intensification of its beef industry over the next ten years to support its expansion into higher value exports to meet global demand.  Rabobank states in its report “Beefing Up in Brazil: Feedlots to Drive Industry Growth” that Brazil’s feedlot capacity will double to 4.5 million head, producing 9 million head of cattle per year and increasing beef production by 2.5 million tons annually by the year 2023.  This expansion and forecasted improvements to quality control, yields, and production, will propel Brazil – which is already the second biggest global beef producer and largest exporter, into higher value markets such as Japan, Europe, and Korea.  The report goes on to state that Brazil’s unrivaled capacity for corn and soybean production will support the expansion of its cattle industry, but to realize its potential, significant changes will need to be made in management, nutrition, and environmental sustainability as the country develops more global-scale, intensive production models.  Currently only 10% of Brazil’s beef is raised in feedlots, but Rabobank predicts with an investment between $250 million and $500 million the industry will see a compounded annual growth rate (CAGR) of 3.2% over the next decade as the use of feedlots and advanced technologies will allow for the slaughter of younger, heavier animals at a more consistent quality level.

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