Calf and lean cattle prices are rising in Brazil's replacement market this year, according to the Cepea research centre, driven by a tighter supply of animals as more females are retained and by steady demand from backgrounders and finishers.
Calves have risen most. The CEPEA/ESALQ calf index for Mato Grosso do Sul state gained 7.83% from January to August, against a 5.89% rise in the CEPEA/ESALQ fed cattle index for São Paulo state and a 1.77% advance in lean cattle, all deflated by the IGP-DI to July.
Cepea attributes the tight calf supply to earlier periods of heavy female culling and high slaughter, which limited the number of young animals coming through. Lean cattle demand is supported by backgrounding and finishing operations looking for animals with strong weight-gain potential.
Lean cattle have lagged calves partly because prices pass through more slowly, but mainly because feedlot occupancy in 2026 is below last year's: uncertainty over the Chinese, European and US markets has made feedlot operators cautious about finishing margins, and since they are the main buyers of lean cattle, their caution has capped that category's gains.
For buyers of calves the sharper rise means a dearer start to the backgrounding cycle; the more moderate rise in lean cattle has eased the exchange ratio between the two categories over the period.
Source: The Cattle Site
Comments
(0)