Report 1634

The tug-of-war between exporters and importers has been intense during the Sial fair taking place from Monday to Wednesday this week in Shanghai. According to sources consulted by the World Beef Report (WBR), traded volumes have been low, but prices held firm compared to last week, despite Chinese importers initially pushing hard to lower prices by around US$ 300/400 per ton.

Beef exports from South America to the US have come to a near standstill over the past three weeks. Shipments that departed origin by April 4 can still enter duty-free until May 27. Any cargo shipped after that will pay the 10% additional duty, explaining the halt in activity.

Algerian ports are “clogged” with Brazilian beef, a Brazilian trader reported, leaving current business with that market at a standstill. Algeria had paid high prices earlier this year, around US$/t 5,900–6,000 for chilled 90 VL, significantly higher than Chinese prices at that time. As a result, Brazil shipped large volumes to the MENA country.

During the Sial Shanghai fair, Hilton quota deals for rump & loin cuts were somewhat lower than in previous weeks. Importers once again pressured to lower purchase prices.

The WBR Mercosur Steer Index fell by 10 cents last week, closing at US$ 3.90 per kg carcass — its lowest in five weeks. The main drop came from Brazil, where the average in exporting states fell to US$ 3.42 per kg carcass (-12 cents) due to a lower fat male price and a depreciation of the real.

As of May 18, Brazil had exported 123,000 tons of beef, maintaining a daily pace of 11,182 tons, according to data from the Foreign Trade Secretariat (Secex).

In April 2025, the total number of cattle sent to slaughter in Mato Grosso reached 581.48 thousand head, the second-highest figure for that month in the historical series and 6.29 % higher than in March 2025.

Brazil’s poultry industry is already feeling the effects of the country’s first-ever confirmed case of highly pathogenic avian influenza (H5N1), as several countries have suspended imports of Brazilian chicken. While the broader economic impact is expected to be limited, there are concerns about losses along the production chain. In the short term, increased domestic supply may even help curb inflation, Valor reported.

Marfrig and BRF announced last Thursday afternoon the merger of their operations, creating a new company with capital of R$ 153 billion (around US$ 27 billion) and expected annual synergies of at least R$ 800 million (roughly US$ 140 million).

Marfrig shares led gains on the Ibovespa and were among the most traded on the B3 exchange last Friday (16), outperforming the cautious domestic market and the main Brazilian stock index, which closed in the red. On Friday, Marfrig’s shares surged 21.35% to R$ 25.07. At the day’s peak, shares were up 26% within the first hour of trading. At the same time, the Ibovespa fell 1% to the 137,000-point level. The strong bullish sentiment around the stock was largely driven by the proposed merger with BRF.

Marfrig posted a net profit of R$ 88 million (US$ 15.5 million) in the first quarter of the year, up 40.3% compared to the same period last year.

With some packers out of the market, increased supply, and sluggish beef sales, prices for fat male and heifers dropped R$ 3.00 early this week, while cow prices remained unchanged, according to Scot. Nationally, the fat male closed last week at R$/@ 291.2, down 2.5% from the previous week. As pasture conditions deteriorate, ranchers have accelerated herd liquidation. Combined with slow demand and limited deals during the week, wholesale bone-in beef prices fell across all categories.

The Uruguayan Minister of Livestock, Agriculture and Fisheries, Alfredo Fratti, has led the INAC (National Meat Institute) delegation to Sial China several times when he was president of the institute, but the last time was ten years ago—and much has changed since then. “I’m surprised by the growth,” he said. Ten years ago, the stand was much smaller than the more than 600 square meters it now occupies, and no luncheons were hosted—something that began in 2023 after the pandemic had passed.

“For China, having access to food is a strategic and highly relevant issue, and as their purchasing power continues to grow and they adopt Western habits, they’re willing to buy everything we have to sell. Therefore, we have an enormous available market,” summarized the president of the National Meat Institute (INAC), Gastón Scayola, from the SIAL fair in Shanghai.

On May 16, the Lequio Group from Argentina and Abasto de Carnes Saturno S.A. announced they had reached a definitive agreement regarding the ownership transfer of the Establecimiento Florida meat plant (#365).

As of that date, Abasto de Carnes Saturno S.A. has assumed the commercial representation of the facility, with a focus on integrating it into its business structure and operations.

“The Chinese market currently has a number of variables in play—the main one being the trade war with Trump. At first, it drove prices up due to fears of supply shortages, but then prices fell again and stabilized at a level slightly higher than before, though below the peaks. Now we are in a more stable pricing environment,” said trader Daniel Castiglioni, head of Castitrading, who lived in China for several years working in the beef import business.

León Li first discovered Uruguayan beef as a young man when he played football in Uruguay. He came from China and joined Danubio in 2004, where he was teammates with a young Edinson Cavani, among others. At that time, Li fell in love with Uruguayan beef, which he now considers “the best in the world.” Today, he imports it into China and sells it at a boutique meat shop in the city of Chengdu.

The value generated from the sale of all products from a Type Steer 2.0 (a British breed or crossbred animal, weighing 520 kilos live and yielding 54%) in April after industrial processing was US$ 1,675 per head, marking a slight 0.3% increase compared to March (US$ 4), according to INAC. The indicator has accumulated an 11% increase since the upward trend began in September 2024.

Driven by strong packer demand — although with some price variability — cattle prices firmed again last week. One trader told WBR that some plants are offering anywhere from US$ 4.70 to US$ 4.80 per kg carcass for the same type of steer. Exceptional deals have been reported at US$/kg 4.85 for special southern steers, but “those are not the norm,” another source said.

Cattle slaughter totaled 56,155 head in the week ending May 17, according to INAC data. That volume was down 2.7% from the previous week’s 57,717 head.

Sheep slaughter saw a strong recovery compared to previous weeks. In the latest week, 11,828 head were processed, according to INAC, well above the six-week average of 7,400 head.

Exports of chilled and frozen beef reached 52,212 tonnes (product weight) in April, up 21% from the previous month, which had marked the lowest volume since January 2022. However, shipments were still 14% below April last year.

In the first four months of 2025, Argentina exported 195,702 tonnes of beef (product weight), down 24.5% compared to the same period last year.

Argentina’s national animal health service, Senasa, has temporarily suspended imports of poultry products and by-products from Brazil, after the country’s Agriculture Ministry (MAPA) confirmed the detection of highly pathogenic avian influenza (HPAI) in commercial breeder flocks last week.

The Argentine Beef Promotion Institute (IPCVA) signed an agreement with Chinese e-commerce platform JD.COM to boost the presence of Argentine beef in the Chinese market.

Despite abnormal conditions caused by heavy rainfall over the weekend — which prompted early cattle movements in some areas and prevented it in others — export cattle prices overall remained mostly steady.

Paraguay’s cattle herd experienced another 3.23% decline year-on-year, with total bovine and buffalo stock reaching 13,034,491 head at the end of the country’s first round of foot-and-mouth disease vaccination. These figures reflect an approximate 7% contraction in the national herd over the last five years.

As anticipated, cattle prices have come down from the peaks reached in the first half of May. “The market has calmed. There’s been plenty of supply, and packers were able to fill their schedules for the rest of the month — one large plant even finished bookings for early June,” a trader told the World Beef Report (WBR).

The battle for primacy between futures and cash prices has been ongoing all of this year and won’t end soon. The sustainability of margins in the processing, cattle feeding and stocker operations will be at risk until the herd rebuilds and that is not a quick fix. Cattle owners will continue to hold tight supplies giving them leverage for higher prices.

Compared to last market test, import prices were slightly to moderately higher, instances generally steady. Trading was slow to moderate. There were heavy supplies of imports from Brazil.

The Australian grainfed beef industry has gone within a whisker of topping 1.5 million head on feed for the first time, informed Beef Central.