Porto Alegre, October 21, 2021 – Brazilian cattle slaughter collapsed in September, according to data from the Federal Inspection System (FIS). This movement is a direct consequence of the Chinese embargo that caused great problems to the Brazilian market. Meat-packers, predicting a huge crisis ahead, bet on the relocation of their slaughter schedules and the increase of idle capacity, imagining that the embargo would have a similar duration to that registered in 2019. However, the time is different, more than 30 days have passed, and the solution seems distant given the silence of Chinese authorities.
In September, the preliminary number of slaughter points to the volume of 1.9 million animals. In September 2020, around 2.7 million head were slaughtered, that is, there was a 30% decline in the total volume of animals slaughtered. Even in October, no strong advance has been noticed, with many slaughterhouses still betting on the expansion of idle capacity to get around the crisis.
From January to September, Brazil slaughtered around 22.04 million head, the lowest level since 2009, down 7% from 23.7 million head in the same period last year. October numbers point to a large decline in the volume of slaughtered animals and may consolidate 2021 as the worst slaughter for the last 15 years.
The crisis of the Brazilian beef industry has been aggravated in October. The scenario is delicate, and there is nothing concrete about China’s return to the market. The dependence is proving to be a serious problem now. Every day without the resumption of purchases from China, the picture for the Brazilian market becomes worse.