"Rising Beef Prices: A Consequence of US and Brazil's Declining Cattle Supplies"
The US is grappling with extremely tight beef supplies as the national cattle herd size has shrunk to its smallest since 1951. In addition, Brazil, a significant player in agriculture, is also projected to experience a decline in beef production. This combination of factors indicates that burger prices are likely to remain high for some time, adding to the burden of consumers already struggling with food inflation.
During a conference in Sao Paulo this week, Joao Otavio Figueiredo, an analyst from consulting firm Datagro, noted that Brazil's cattle availability is predicted to decrease as early as next year. This essentially implies that beef production costs will increase, putting pressure on the global supply of red meat. This comes at a time when Brazil has increased its beef exports to the US.
Figueiredo anticipates a 4.6% drop in Brazil's animal slaughter rates next year and a 7.5% decrease in 2026. This suggests that the years of beef production expansion in South America are coming to an abrupt end. This is happening when US companies are looking to Brazil for beef supplies to offset the tight domestic supplies, which are at their lowest since 1951.
"The decline in the Brazilian cattle herd occurs as beef production is already limited by a severe shortage of slaughter-weight animals in the US, which has reduced profits for processors such as Tyson Foods Inc. and Cargill Inc. This is not good news for JBS SA, Marfrig Global Foods SA, and Minerva SA, which depend on Brazilian cattle for a significant portion of their beef production," according to Bloomberg.
It's worth noting that US meat imports from Brazil have significantly increased in recent years.
Statista data reveals that in 2022, the US imported 51% of its beef from Canada and Mexico, while Brazil accounted for 14%, making it the third-largest supplier.
Unfortunately, no one seems to be stepping in to address the rapidly deteriorating US beef cattle herd.
Supermarket retail ground beef prices continue to rise.
According to VP Harris, the solution to the escalating beef and food prices is communist price controls.
It's unlikely that there will be a significant rebound in the nation's beef cattle supply until at least 2026. It will take years.
Perhaps the Fed could print more beef? Unfortunately, that's not possible. However, Bill Gates might have a solution.
"Bottom Line"
The decline in cattle supplies in both the US and Brazil is a concerning issue. It's not just about rising beef prices, but also about the broader implications for the global food supply and the economy. What are your thoughts on this matter? Do you think there are viable solutions to this problem? Feel free to share this article with your friends and discuss it. Don't forget to sign up for the Daily Briefing, which is available every day at 6pm.
"Rising Beef Prices: A Consequence of US and Brazil's Declining Cattle Supplies"
The US is grappling with extremely tight beef supplies as the national cattle herd size has shrunk to its smallest since 1951. In addition, Brazil, a significant player in agriculture, is also projected to experience a decline in beef production. This combination of factors indicates that burger prices are likely to remain high for some time, adding to the burden of consumers already struggling with food inflation.
During a conference in Sao Paulo this week, Joao Otavio Figueiredo, an analyst from consulting firm Datagro, noted that Brazil's cattle availability is predicted to decrease as early as next year. This essentially implies that beef production costs will increase, putting pressure on the global supply of red meat. This comes at a time when Brazil has increased its beef exports to the US.
Figueiredo anticipates a 4.6% drop in Brazil's animal slaughter rates next year and a 7.5% decrease in 2026. This suggests that the years of beef production expansion in South America are coming to an abrupt end. This is happening when US companies are looking to Brazil for beef supplies to offset the tight domestic supplies, which are at their lowest since 1951.
"The decline in the Brazilian cattle herd occurs as beef production is already limited by a severe shortage of slaughter-weight animals in the US, which has reduced profits for processors such as Tyson Foods Inc. and Cargill Inc. This is not good news for JBS SA, Marfrig Global Foods SA, and Minerva SA, which depend on Brazilian cattle for a significant portion of their beef production," according to Bloomberg.
It's worth noting that US meat imports from Brazil have significantly increased in recent years.
Statista data reveals that in 2022, the US imported 51% of its beef from Canada and Mexico, while Brazil accounted for 14%, making it the third-largest supplier.
Unfortunately, no one seems to be stepping in to address the rapidly deteriorating US beef cattle herd.
Supermarket retail ground beef prices continue to rise.
According to VP Harris, the solution to the escalating beef and food prices is communist price controls.
It's unlikely that there will be a significant rebound in the nation's beef cattle supply until at least 2026. It will take years.
Perhaps the Fed could print more beef? Unfortunately, that's not possible. However, Bill Gates might have a solution.
"Bottom Line"
The decline in cattle supplies in both the US and Brazil is a concerning issue. It's not just about rising beef prices, but also about the broader implications for the global food supply and the economy. What are your thoughts on this matter? Do you think there are viable solutions to this problem? Feel free to share this article with your friends and discuss it. Don't forget to sign up for the Daily Briefing, which is available every day at 6pm.
