In an atypical week marked by Easter holidays and a noticeably slower trading pace, some Chinese market participants are beginning to express concern over the recent escalation in prices, partly driven by the heavy use of available quotas by Brazil and Australia.

As of May 1, exports from Mercosur countries within the Hilton quota will be exempt from the 20% tariff, under the provisional entry into force of the free trade agreement between both blocs. “That factor is already weighing on negotiations for future shipments. Prices should not remain at current levels,” said a Uruguayan exporter. In a scenario of limited supply and reduced slaughter, some Uruguayan plants were quoting around US$/t 20,000 for new shipments, about US$/t 1,000 above last week’s references.

An Argentine trader told World Beef Report (WBR) that the US market is going through a slower phase, with limited activity over the past two weeks. “Last week was very slow and this one hasn’t started any better,” he said, noting the lack of significant new deals.

Despite the current pause, the trader stressed that US market fundamentals remain solid, particularly due to the strength of the domestic market. “The domestic market sets the pace; the shortage is still significant,” he said.

Logistics in the Middle East continues to be the main source of concern. “We are still dealing with issues with containers,” said a trader, referring to shipments being diverted to other countries and then redirected overland.

A Chilean importer said the market continues to operate with high prices from major suppliers, but with growing pressure on profitability. According to the source, Brazil is offering in the range of US$/t 6,500–6,700 for 19/20 cuts, while Paraguay stands at US$/t 7,250–7,350—levels he described as effectively traded.

The appreciation of regional currencies against the US dollar and the acceleration of slaughter cattle prices in Brazil led to higher cattle prices across the region. The WBR Mercosur steer index rose 11 cents on the week to US$ 4.83 per kg carcass weight.

The Brazilian government will not move forward in 2026 with a control scheme over the beef export quota to China, a decision that exposes the sharp differences between producers and industry, according to Pecuaria. The issue was not included in the last Gecex meeting and, for now, is not on the agenda.

Average calf prices in Brazil are showing a strong upward trend. Since the most recent low of R$/@ 8.1 reached in September 2023, prices have risen by 91% in local currency.

JBS is beginning to face a more challenging scenario, with rising cattle costs in Brazil and a weakened beef business in the US. Herd rebuilding —with retention of females— is already pushing prices in Brazil, marking a cycle change after several years of lower costs for the industry.

JBS projects Capex (investment) of US$ 2.4 billion for 2026, with about US$ 1.4 billion earmarked for expansion and US$ 1 billion for maintenance, according to its global CFO, Guilherme Cavalcanti. The company prioritizes organic growth and, for now, has no planned announcements regarding mergers and acquisitions.

The upward trend in slaughter cattle prices intensified over the past week, driven by “the asymmetry between constrained supply and demand that shows no signs of easing,” according to consulting firm Agrifatto. The source added that “supported by the good quality of pastures at this final stage of summer, producers maintained their bargaining power intact, adopting a defensive stance by pacing sales.”

As is done with other quotas for the country’s beef exports, the National Meat Institute (INAC) decided that “in the coming weeks” it will proceed with the distribution of the quota granted by China to Uruguay.

The suspension of export approval to China for San Jacinto accelerated discussions on measures to minimize the risk of new cases of veterinary drug residues exceeding thresholds allowed by the importing country.

Data released by the Central Bank (BCU) for February showed little change in the volume of credit to the agricultural and agro-industrial sectors, with past-due loans remaining low.

As of the end of February, the meatpacking industry had bank debt totaling US$ 509 million, a historical maximum. Compared to a year earlier, debt increased by US$ 91 million.

Activity in the cattle slaughter market is minimal due to a lack of supply. Export-oriented plants continue to pressure purchase prices downward, while those supplying the domestic market are showing a greater willingness to pay several cents more.

With several plants suspending operations and others reducing activity, cattle slaughter in the week ending March 28 declined, as anticipated given demand conditions.

Sheep slaughter fell last week to 6,371 head, nearly 1,400 fewer than the previous week and the lowest level so far this year, INAC reported. Lambs accounted for 3,209 head (50% of the total).

The long-awaited opening of the Chinese market to Argentine beef offal continues to be delayed, industry sources said. A meeting initially scheduled for March —covering this issue as well as the approval of new plants and the reinstatement of suspended facilities— was first moved to April and has now been postponed to May, within the framework of SIAL Shanghai.

By the end of February, 22,946 tons of the EU Hilton quota for the 2025/26 period had been utilized, leaving 6,442.96 tons remaining.

Export cattle held at the lower price levels reached the previous week, after processors resisted further increases following the end of kosher slaughter and more subdued European demand.

The Paraguayan Meat Chamber (CPC) stated that idle industrial capacity in packers does not respond to anti-competitive practices, but, on the contrary, reinforces competition for cattle. According to the association, this is a characteristic of a capital-intensive industry.

The Paraguayan Association of Meat Producers and Exporters (APPEC) set out a clear position in the debate over a possible change in foot-and-mouth disease sanitary status and defended the continuity of the current vaccination-based system, considering that there are no technical, sanitary, or economic grounds that justify a modification in the short term.

The president of Frigorífico Concepción, Jair Lima, firmly denied reports suggesting the company is facing financial distress, while confirming that the group continues to pursue a growth strategy focused on diversification into pork production amid a challenging environment for the regional meat industry.

The end of the foot-and-mouth vaccination campaign —which could increase cattle supply— and rumors about a possible bankruptcy of Frigorífico Concepción created uncertainty around price formation this week.

US Health Secretary Robert F. Kennedy Jr. is pushing for changes to hospital menus to align them with his revamped food pyramid, as part of the Make America Healthy Again agenda, according to Bloomberg.

A federal appeals court enabled Florida to keep in force the law that prohibits the production and commercialization of cultivated meat, considering that it does not conflict with federal regulation. The decision supports the validity of SB 1084, in force since July 2024.

Boneless beef stocks in the US Mid-Atlantic region — which includes Philadelphia, a key beef import hub — fell by 4,994 metric tons month-on-month, bringing the total to 111,599 metric tons. Excluding 2018, this is the lowest February boneless beef inventory level in the region in the past 10 years. In 2018, stocks stood at 107,858 metric tons.

Lamb imports into the US, both fresh and frozen, are trending lower in 2026 compared to prior years, with a sharper decline in fresh product. Fresh volumes are down 22.3% year-on-year, while frozen imports have fallen 14.3%, Expana said.

Cattle producers are looking to extend last week’s late rally in cash and futures into the current week, supported by the typically stronger post-Easter demand period for beef. While packer margins have narrowed, they remain in positive territory, keeping slaughter activity active.

Compared to the prior test, US beef import prices were mostly moderately lower, although some transactions held firm for immediate delivery. Trading activity remained slow, while South American supply continued to move at a moderate to active pace.

Australian beef imports into China have reached 50% of their annual safeguard quota for 2026 as of March 26, according to China’s Ministry of Commerce of China.

The pace is running well ahead of last year, with the halfway mark reached in just 85 days. Australia’s industry is familiar with triggering the Special Agricultural Safeguard (SSG), and this would mark the seventh time the mechanism is activated once the threshold is fully met.

Australia’s cattle herd is forecast at around 30.8 million head in 2026, down 1% year-on-year but still at historically high levels. According to MLA projections, supply will remain strong in the near term, supported by higher slaughter and production alongside solid export demand.

Australia’s sheep industry is set to enter a lower supply phase in 2026, with the national flock projected to fall 2.7% to 67.1 million head, according to MLA. The decline reflects several years of heavy turnoff and challenging seasonal conditions across key southern regions, which have limited the capacity for flock rebuilding.

South Korea continues to consolidate its position as one of Australia’s top export markets for beef, driven by strong consumer demand despite tariff pressures linked to the KAFTA safeguard mechanism. The quota is expected to be reached by late July in 2026, earlier than usual, which would trigger a tariff increase from 5.3% to 24%.

In February, China blocked the entry of around 350 tons of beef from eight suppliers, according to information from Chinese Customs released by OIG+X.

Gastón Scayola

Gastón Scayola, president of the Uruguayan Meat Board INAC, highlighted the reopening of the Florida plant but warned about the structural challenge of increasing cattle production to sustain industrial activity in Uruguay.