Report 1641

The Mercosur beef export market to China is operating with stability and relative fluidity. Regional supply is limited, particularly in the case of Uruguay and Argentina, which complicates deal-making. However, the transactions that are being closed are at prices equal to or slightly higher than those of the previous week.

The chilled beef export market to Europe has remained firm in recent days, with prices holding steady compared to last week. The dominant factor is the tight supply, which continues to place upward pressure on prices.

During the recent Mercosur presidential summit held in Buenos Aires, representatives of the bloc and of EFTA (the European Free Trade Association, composed of Switzerland, Norway, Iceland, and Liechtenstein) announced the conclusion of negotiations for a free trade agreement. Talks began in 2017.

As the key date of July 9 approaches and the Trump administration begins sending tariff notifications to various countries (see North America), the U.S. beef import market has once again come to a standstill — just weeks after it had started gaining momentum.

June saw a sharp decline in beef shipments from South American and Oceanian countries to the United States. The trade flow has been significantly affected by White House trade policy and the back-and-forth decisions that have made importers more cautious when making foreign purchases.

The average price of steers for slaughter in Mercosur countries fell for the second consecutive week, dropping below the US$ 4 benchmark that had held for the previous two weeks. The WBR Mercosur Steer Index declined by 3 cents on the week to US$ 3.98 per kilo carcass weight, mainly impacted by falling slaughter cattle prices in Brazil and a significant depreciation of the Argentine peso.

Brazil exported 241,100 tons (shipment weight) of fresh beef in June, with the average value continuing to rise. According to the Foreign Trade Secretariat (Secex), the average FOB price in June was US$/t 5,448, almost US$/t 250 more than in May and the highest since October 2022.

Brazil's beef exports in June more closely resembled patterns seen in previous years rather than recent months. China once again overwhelmingly dominated as the main destination, accounting for 56% of total beef shipments, while exports to the United States fell to their lowest level in a year.

The European Union’s need for beef imports is reflected in increasing shipment volumes from Brazil. In June, according to Secex data, Brazil shipped 2,370 tons of chilled beef and 5,233 tons of frozen beef to the EU.

In the first week of July, Brazilian beef exports maintained a strong pace with rising prices. The Foreign Trade Secretariat (Secex) reported that 48,716 tons were shipped during the first week at an average price of US$/t 5,541.

The latest data from the Mato Grosso Institute of Agricultural Economics (IMEA) show that the corn-to-finished male exchange (boi gordo) ratio in Mato Grosso has reached its most favorable level for cattle producers in the state since 2018.

The prolonged rainy season caused a delayed supply of seasonal animals in the state of Mato Grosso, leading to an increase in slaughter during June 2025, according to Imea.

Brazilian poultry exports were affected by the closure of several major markets following the detection of bird flu in Rio Grande do Sul. In June, Brazil exported 314,000 tons of poultry meat, down 29% from April.

On Thursday, the Ministry of Agriculture (MAPA) reported that seven countries had lifted their restrictions on Brazilian poultry imports. The bans were imposed after the confirmation of a bird flu outbreak in the municipality of Montenegro, in Rio Grande do Sul. However, some key markets —such as China— still maintain a complete ban on poultry imports from Brazil.

The usual increase in domestic demand following early-month salary payments was not enough to reverse the downward trend in slaughter cattle prices. The fat male (boi gordo) fell for the second consecutive week. According to consultancy firm Scot, the average price in the main cattle-producing states — for 30-day payment and excluding the Funrural tax — dropped R$ 3.2 during the week to R$/@ 297.2; compared to two weeks ago, the decline totals R$ 6.6.

The severe challenges faced by the meatpacking industry in 2019/20 due to a very high outflow of live calves in the two preceding years do not appear likely to repeat over the next two years. Although live cattle exports in 2024/25 were the second highest on record, with 387,000 head, there were relatively few calves from the 2024 generation among them.

Last week, another live cattle vessel was loaded in Montevideo: The Ocean Drover Wellard, a Singapore-flagged ship with capacity for around 22,000 head, destined for Turkey. The operation was carried out by the firm Olkany.

Agronegocios del Plata (ADP) has signed a purchase agreement to acquire the assets of Goyaike, which include the companies Garmet and Del Carmen. Goyaike was Pérez Companc’s business unit in Uruguay, which, after selling the San Jacinto meatpacking plant a couple of years ago, is now divesting from these other companies as well.

The slaughter cattle market remains firm, but several operators consulted yesterday afternoon agreed that “some additional supply has emerged” since last week. At the same time, expectations are that starting next week, part of the demand will begin to focus on grainfed animals — either from the buyers' own feedlots or through prearranged agreements — which will moderate their interest in spot market animals.

Cattle slaughter in June rose for the sixth consecutive month year-on-year, totaling 1.22 million head in the first half of the year, about 64,000 more (+5.5%) than in the same period in 2024. It was the third highest first-half slaughter in history, only behind the record levels of 2022 and 2021.

There is still significant interest from meatpacking plants to slaughter sheep, but supply remains extremely limited. Some plants are offering up to 15 cents above the weekly reference price published by the Livestock Brokers Association, especially for ewes, if carcasses weigh less than 24 kilos. Lambs are approaching US$ 4.70 per kilo carcass weight, while ewes are trading around US$ 3.90.

The Secretariat of Agriculture published Resolution 116/2025, which allocated the 2025/26 Hilton Quota, in effect from July 1st. The quota granted by the EU to Argentina is the largest among all recipient countries, totaling 29,389 tons. It was distributed among 40 packing plants and 29 joint projects between producers and packing plants.

Although no one claims to have official information, there is growing speculation among various stakeholders in the beef supply chain that President Javier Milei may announce the full elimination of export taxes on beef during the upcoming Palermo Rural Expo, the country’s most important agricultural fair, which will take place from July 17 to 27.

Argentina’s June cattle slaughter totaled 1.126 million head, virtually identical to May’s figure, according to data from INDEC. However, when adjusted for the 18 business days in June, the daily average reached nearly 62,500 head, 16.7% higher than the 53,600 head averaged across May’s 21 business days.

In the first half of 2025, Argentina slaughtered 6.596 million head of cattle, up 0.5% from the same period in 2024. Cow slaughter dropped sharply, down 12% year-on-year to 1.223 million head. In contrast, steer slaughter rose 13% to nearly 551,000 head, while young steers increased by 1% to 2.754 million, and heifers rose 7% to 1.884 million head.

Export steer prices recorded another upward adjustment, with an increase of around Ar$ 50 per kilo carcass weight. Crossbred steers of British breeds with better quality now range between Ar$ 5,150 and 5,300 per kilo, while steers with zebu crosses are priced between Ar$ 5,000 and 5,100.

Paraguay exported 35,635 tons of beef in June at an average value of US$/t 5,845, according to information released by Senacsa. This volume was the highest of the first half of the year, while the average value maintained the upward trend that has prevailed since February.

A significant reduction in activity by Paraguay’s two largest meatpacking companies led to a drop in slaughter during June. Senacsa reported that export plants slaughtered 198,426 head of cattle, nearly 24,000 fewer than in May — when fat cattle prices peaked — and over 12,000 head (6%) fewer than the same month last year.

After four weeks in which the industry held firm at a purchase price of US$ 3.50 per kilo for standard steers — a level at which very few deals were closed due to producers' reluctance to accept that value — a significant upward correction has taken place in recent days.

President Donald Trump on Monday unveiled the first in a series of planned letters threatening to impose higher tariffs on key trading partners, including 25% levies on goods from Japan and South Korea starting August 1, Bloomberg reported.

This week, live cattle began entering the United States from Mexico once again, after the trade flow had been halted due to the confirmed presence of the New World screwworm in the Mexican herd—a parasite that has been spreading northward from Central America, Reuters reported.

Packers purchased for a full slaughter week this week and finished last week paying fully steady prices with the previous week. Cattle in the south sold from $224-$225 and live sales in the north were $230-$234 — mostly $230-$232 steady with last week. Dressed trades were also steady at $368-$372 and mostly $368-$370, according to The AG Center.

Compared to the last market test, beef import prices in the USA were slightly to moderately higher. Trading was slow to moderate.

The gradual reduction in the quarterly quota under the 481-quota scheme for third countries has not prevented the growth in volumes shipped.

In 2024, the EU had 132 million pigs, 72 million bovine animals, 57 million sheep, and 10 million goats. Compared with the previous year, all livestock populations declined – the pig population decreased by 0.5%, bovines by 2.8%, sheep by 1.7%, and goats by 1.6%.

In the first quarter of 2025, beef production in the European Union totaled 1.58 million tons, a 3% decrease compared to the same period last year—equivalent to a decline of approximately 56,000 tons. The sharpest reductions were seen in France, Germany, and the Netherlands.

The FAO meat price index averaged 126.0 points in June, up by 2.6 points (2.1%) from May and 7.9 points (6.7%) from the same month last year, reaching a record level. This increase was driven by rising prices in all meat categories except poultry.

Australia’s beef exports have reached unprecedented levels, setting new records for both June and the full 2024–25 financial year, according to official data from DAFF, informed Beef Central portal.

Australian grainfed beef exports reached record levels in June and across the entire 2024–25 financial year, said Beef Central. June shipments hit nearly 40,000 tons, beating the previous record of 37,000 tons set in April.

The main international suppliers to the Chinese market significantly increased their shipments to this destination in June, suggesting that an uptick in arrivals—mainly from South America—can be expected in August.

Brazil and China are in the early stages of negotiations to create an exclusive soy supply chain, aimed at meeting the demanding sustainability and quality standards set by the Chinese government.

INAC President Gastón Scayola

The president of Uruguay’s National Meat Institute (INAC), Gastón Scayola, discussed his goals at the helm of the organization, the ongoing debate over ending foot-and-mouth disease (FMD) vaccination, Uruguay’s relationship with China, and his concerns about the sheep sector, among other topics.