Tim Hornibrook posed the question, with Brazil set to dramatically intensify its beef sector what will be the flow on effects for other beef exporting nations and for Brazil’s cropping sector. Tim Hornibrook, quoting a recent Rabobank report, said Brazil is expected to double its feedlot capacity over the next 10 years. This will dramatically increase Brazil’s exports of beef at a time when the world’s ability to grow production is under pressure.
The growth of the Brazilian feedlot sector not only frees up pasture land for conversion to cropping but also provides increased domestic demand for feed. Given much of the growth of the grain sector is taking place in remote areas of Brazil with resulting high transportation costs, Tim Hornibrook said that it is far more cost effective to sell the corn to domestic feedlots who can then transport the higher value product to port.
Tim Hornibrook said that the other potential benefit resulting from an intensification of Brazilian beef production is an increase in the quality of the beef produced by resulting from increased consistency of production. An increase in consistent supply of a higher quality product could open up access for Brazil to compete in higher value markets such as Korea and Japan that are currently dominated by Australia and the USA.