The power and wealth in this industry is undeniable. On-going growth in Brazil, increasing global consumption, projected to reach 3.09 million tonnes in 2019/2020, and a proactive federal government presents attractive investment opportunities in livestock production in Brazil.
Opportunities
The quality of Brazilian pasture is often average or poor. Practices such as fertilization, liming, and division of pastures into small areas (paddocks) still face some resistance due to lack of information, low technical development and low access to capital for investment, especially for the small producer.
This has resulted in a stocking rate below the potential rate of occupancy.
Rearing and fattening activities have the greatest potential to be intensified.
There are opportunities for new technologies aimed at increasing production thereby reducing the need for new land. It is likely large companies will make acquisitions to produce new technolgies.
Other opportunities include:
- Favourable weather conditions and easy to fix land-as required
- Low cost of production in the farms and slaughterhouses
- A large unsaturated market
- Good variety of cattle ration
- Plenty of qualified people for the field and farm management
- Acceptance of Brazilian products in Europe and US
- Good quality product due to extensive pastorisation
- The opportunity to further exploit the export of live cattle.
Regulatory and legal environment
Environmental and labour legislation in Brazil is strict while the country's legal system can be confusing and does not grant legal certainty to companies operating in Brazil.
Trade barriers against Brazil are also strong and there are few laws that defend the breeders in the country.
Market trends
There are a number of issues to consider before entering Brazil’s growing beef market. Some of them such as increased intensive farming of cattle for the international market and increased pressure for sustainable practices are global trends.
Others, like the concentration of production in companies such as JBS and Marfrig are market specific. New Zealand companies need to analyse and address these points in order to succeed in the Brazilian market.
