Brazilian beef market strengthens as export risks emerge

Brazilian beef prices have started 2026 on a strong footing, supported by robust export demand and expanding supply. However, this momentum faces increasing uncertainty, as China’s import quota, renewed trade barriers in Mexico, delays in the EU-Mercosur agreement, and logistical tensions in the Middle East begin to reshape export dynamics.Brazilian fed cattle prices have strengthened since the start of the year, increasing by 9% to R$355.45 per 15kg (€3.93 per kilo) as of March 27, marking a 12.3% year-on-year (YoY) increase. In parallel, calf prices moved more sharply by 21.6% YoY to R$3,285 per head (€545.19). This reflects stronger upward momentum in calf prices, while fed cattle values have followed a more gradual upward trend, with a more pronounced increase in February. Price levels have been supported by robust export demand and favorable pasture conditions, allowing producers to hold cattle and strengthen their bargaining power.Brazilian beef exports expand further in early 2026 Brazilian beef exports continued to expand at the start of 2026, following a strong performance in January (+28.6% YoY). In February, volumes increased by 23.9%, reaching 235,890 tons. In value, exports rose more sharply by 41.8%, totalling USD 1.33 billion. This growth was primarily driven by sustained demand from China, where shipments increased by 11.9% YoY. China remained the dominant destination, accounting for 44% of total Brazilian export volumes.Other key markets also recorded strong growth. Exports to the United States increased by 57.7%, while shipments to Chile (+24.6%) and Mexico (+63.3%) showed strong gains. More pronounced increases were observed in emerging destinations, including Russia (+301.1%), Egypt (+119.1%), and the Philippines (+53.3%). The increase in Russia reflects an ongoing recovery in imports since 2023, supported by the approval of additional Brazilian plants in 2024 and the easing of sanitary restrictions following a positive audit by Russian authorities.Slaughter levels reinforce supply Strong export performance has been supported by an expansion of supply. Cattle slaughter reached 42.9 million head in 2025 (+8.2% YoY), continuing the upward trend observed in recent years. Since 2022, slaughter volumes have increased by 43.4%, reflecting the expansion phase of the Brazilian cattle cycle. In parallel, total carcass output reached 11.1 million tons (+7.2%), reinforcing the availability of beef in the market.This growth has been supported by strong investments in the sector since 2020, alongside an increase in female slaughter. This trend was already evident in 2024, when higher female slaughter contributed to a slight decline in the cattle herd of 0.2%, to 238.2 million head. At the same time, average carcass weights declined by 0.9% to 258.5 kg per head. Although productivity remains relatively high, the decline since 2022 (from 267.5 kg) suggests that recent supply growth has been driven more by herd liquidation than by efficiency gains.Chinese quota limits export growth despite diversification efforts China’s import quota for beef in 2026 is raising concerns in the market. The quota is set at 1.1 million tons, while volumes exceeding this level are subject to a 55% tariff.Shipments to China already totalled 223,426 tons in the first months of the year. At this pace, the quota could be reached as early as May, increasing the risk of a “rush effect,” where volumes are concentrated in the first half of the year followed by a sharp slowdown. As China accounts for a substantial share of Brazilian beef exports, any restriction in access could redirect supply to the domestic market, potentially putting pressure on prices and affecting slaughter dynamics.While diversification has become a key focus, alternative destinations remain constrained. In Mexico, the reintroduction of a 25% import tariff reduces competitiveness, while delays of up to 24 months in the EU-Mercosur agreement limit its short-term impact.Other regions, including Southeast Asia (such as the Philippines, Indonesia, and Vietnam), Japan, South Korea, and the Middle East, offer diversification potential. However, these markets present challenges, including tariff and sanitary barriers, logistical constraints, and differences in consumer preferences that do not always align with Brazil’s export mix. Disruptions in maritime routes, particularly those affecting flows to the Middle East, may further increase costs and delay shipments, reinforcing the sector’s dependence on stable global shipping networks.Outlook The current trade environment introduces uncertainty for the Brazilian beef sector. Reduced access to its main export market, combined with logistical constraints and a potentially stronger Brazilian real, could weaken export competitiveness in the upcoming months. As a result, expectations point to a slowdown in slaughter activity and a potential decline in animal protein production, estimated between 2% and 3.5%.In this context, companies are likely to adapt through diversification strategies, including the use of international subsidiaries to access alternative quota systems and adjustments in product mix, reducing exposure to premium cuts and increasing the share of processed or lower-value products that find more elastic demand in emerging markets. However, these adjustments may increase operational complexity and reduce efficiency.From a price perspective, seasonal factors may still put some downward pressure on the market, as the end of the rainy season in Q2 leads to pasture deterioration and higher cattle marketings. However, this is likely to be temporary, with prices, according to Rabobank, expected to resume an upward trend by late Q2, supported by domestic demand linked to the World Cup and continued export activity. Additional references: CEPEA, Comex Stat, IBGE, FECAP, Rabobank.Note: Trade data refers to HS codes 0201 and 0202.