Beef production growth in Mercosur shows signs of exhaustion

Cattle slaughter in Mercosur countries during May is estimated at around 4.1 million head, the highest monthly volume since August 2024. However, when looking at the annualized trend, slaughter volumes have stopped growing in recent months and are likely to take a moderate downward path starting in the second half of this year.

Considering slaughter at export-oriented plants in Brazil and Paraguay, along with total slaughter in Argentina and Uruguay, 4.09 million head were processed in May—about 200,000 more than in April, although only slightly above May 2024 levels. Assuming an average carcass weight of 255 kg, this amounts to just over 1 million tons.

The largest increase occurred in Brazil, where export plants slaughtered over 2.5 million head, the highest number since August of last year. Paraguay also recorded a significant monthly increase of 50,000 head, while Uruguay's slaughter rose by around 10,000 head. Argentina, in contrast to its neighbors, showed a moderate monthly decline of 12,000 head.

On an annualized basis, slaughter in the 12 months to May across the main beef-exporting region globally reached a peak of over 47 million head—9 million more than the 2021 low of 38 million. This corresponds to about 12 million tons of beef from the aforementioned plants, plus an additional 2.5 million tons if considering all Brazilian facilities with some form of inspection (federal, state, or municipal). However, the growth path of production is showing signs of exhaustion, with stabilization at current levels since the beginning of the year.

With expectations of herd rebuilding beginning in Brazil, cattle slaughter in Mercosur is likely to contract from the second half of this year onward. Nevertheless, the decline will likely be mild, given the high prices that the meatpacking industry is paying for cattle, encouraging greater investment in finishing and stronger incentives to send animals to slaughter.