“Now is the time to hold and defend”

"Last year we were discussing stocks, with a market that wasn’t moving. This year is different — there’s much more expectation, and now we’re talking about price, which means there’s interest,” said Fausto Brighenti of Ideal Trading, referring to Chinese demand during the Sial fair in Shanghai.

On pricing, he noted: “We’re US$ 400 below what would make the business profitable and flowing,” but emphasized that there is “strong demand and interest” despite the price debate.

In his view, for Mercosur countries, “now is the time to hold and defend,” so that in the second half of the year, prices will be “better than in the first.”

According to the trader, the region “must be clever, smart, and patient so that when prices aren’t right, we don’t sell” — especially when dealing with “the biggest and most hostile customer in the world, a great negotiator.”

Brighenti noted that demand for grainfed beef “is clearly growing.” Regarding this trend, he said, “It’s a major opportunity for Argentina and Uruguay to stand out from Brazil, which doesn’t compete in this segment due to its animal type and genetics.”

In Argentina, there’s also anticipation around offal export approval. “I think we need to double down on that — on grainfed and on offals,” he stressed.

He added that the rising cost of U.S. beef is boosting China’s interest in grainfed, but said “this was already happening last year, even before the trade war.”

“The Chinese consumer is learning to enjoy fire-cooked beef, and this is a big opportunity for us to be seen. We won’t take the whole market, but we’ve placed ourselves in the window as a real alternative — genetically equal to the U.S. and Australia, and often more competitive on price.”

Regarding grainfed prices, Brighenti said that Australian product “is closer to US$/kg 8–9, same as the U.S.,” while “Argentina and Uruguay aren’t reaching those prices yet, but in the current situation we have the opportunity to present ourselves and be noticed.”

On second-half demand, Brighenti expects it to remain active and sees a likelihood of higher prices, “because cattle prices are already high — the Mercosur average is above US$/kg 4 carcass — and there’s a global meat shortage driving Europe to pay US$ 18,000 for rump & loin, which is a very, very high price. So there’s no reason China should win the pricing battle in the second half.”