Brazil’s live cattle price is approaching a record of R$400 per arroba, as tight supplies and export demand coincide with a recent rise in the dollar against the real. Higher cattle costs are also putting pressure on domestic beef consumers and businesses across the supply chain.
In São Paulo, a key market benchmark, cattle were trading at around R$390 per arroba, up more than 20% so far this year, according to Cepea. Around a third of the annual increase occurred in October. Some transactions involving export-focused meatpackers have already reached R$400, according to Datagro research used to calculate an indicator for settling B3 contracts.
The latest price gains have been supported by expectations that China will resume buying Brazilian beef in November or December, after its 2026 tariff-rate quota was exhausted around midyear. In 2027, China will have a quota of 1.128 million tonnes of Brazilian beef at a 12% tariff; volumes above that limit will face a 55% rate.
A stronger dollar has also made Brazilian exports more competitive. The currency rose 9.15% in the previous week after markets reacted to the result of the second round of elections. Agrifatto chief executive Lygia Pimentel said the exchange rate had encouraged meat processors to export and earn revenue in dollars, supporting cattle prices.
Demand from the United States is another factor. Pimentel described it as an important destination that pays well, while analysts also point to limited cattle supply linked to the livestock cycle. Cepea researcher Thiago Bernardino de Carvalho said restricted supply, along with purchases by China and the US, left little room for prices to fall through the end of the year or the first half of next year.
Datagro’s João Figueiredo said R$400 could be a ceiling for cattle used to produce beef for the domestic market, as prices at that level begin to weigh on local consumption. Year-end demand may provide some support, but he also flagged uncertainty over domestic demand in 2027, including the possible effects of government measures to adjust public finances.
Carvalho expects margins across the beef supply chain to tighten next year as consumers pay more and feedlot operators face higher costs to buy animals for fattening. The spread between the purchase price of cattle and the sale price of beef is among its narrowest since 2023, he said. Pimentel said lower margins for meatpackers could later be offset by export sales at a stronger dollar rate and continued demand from China and the United States.
Sources: Folha Mercado.