Year in review 2016-2017, Northern Territory Cattlemen's Association
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Brazil looking for new business China increased during this same period. There are some challenges and opportunities in Brazil. Brazil is a developing country, there are a lot of issues that need to be dealt with. I will talk about the opportunities first though. Feedlots: Brazil is the largest soy bean exporter in the world and is the second largest producer of corn. Because of Brazils climate they are able to grow two crops per year (there can be 2.5 meters of rainfall per year in some regions), which means some regions will plant soy beans during the summer and corn in the winter. This is huge in terms of corn availability in the country; Brazil believe that they will be able to double the number of cattle in feedlots over the coming decade as a result. In 2015 there were 4 million head of cattle in feedlots in Brazil, which is 10% of the total number of head killed per year. In the coming 10 years they believe that the number of animals in feedlots will reach 8 million head. In 2016 there was a decline in the number of head in feedlots this came about as a result of bad weather which occurred right when farmers were planting their corn crops. This crop was mostly bad and the stocks of corn were not available as they had been exported earlier in the year to take advantage of good exchange rates. As a result local corn prices increased and farmers did not send their cattle to feedlots. As I mentioned earlier, 80% of the beef herd are the Nelore breed, however in the south of Brazil there are also some European breeds (Angus and Hereford) the climate there suits them well. Brazil have started to cross-breed to produce animals that can withstand the heat and conditions of Central Brazil but also perform well in terms of productivity and meat quality. The end result of this will hopefully be that Brazil can become an exporter of premium meat. At the moment all of the premium meat produced by Brazil is sold locally and they even have to import premium beef to meet the demand. Pastures: There is some land in Brazil that has degraded and underused pastures. A lot of this land is now being bought up by grain producers who want to plant crops on it, or are recovering the pastures. After two years of producing crops the land is regenerated and is able to produce outstanding pastures for livestock to feed on. There is currently about 5 million hectares in Brazil that is used to integrate grains and livestock in this way. On the improved pasture the stocking rate is increased to two animals per hectare, which is a lot for Brazil. Some of the challenges for Brazil relate to the image of the quality of their product. Brazilian exporters did some research in 2014/15 in order to understand how their product is perceived by consumers worldwide. They found that Brazils product is perceived as low quality compared to a lot of their competitors. Brazil is working hard on this, and the scandal at the end of March will mean that even more work may need to be done. But they are trying to address the problem and the first step was to get access to the uS market by proving that they have high food safety and quality which I believe they have. Infrastructure in Brazil is also a huge challenge. Brazil is the main exporter globally of soy beans, coffee, poultry, beef, sugar cane etc. As a result there is a lot of competition in the ports in order to export all of this product. There is also a lot of rainfall, which is an issue for the road infrastructure (see Image 1). This means that Brazil cannot increase its exports as much as they want to without a lot more investment in the necessary infrastructure. It is happening, but not at the pace that it needs to. The main message of my presentation is to use the recent scandal in Brazil as a case study in how to be prepared for challenges and changes that can happen overnight and how to overcome them. Every country who is a large producer and/or exporter should be aware of the impact that social media can have and how quickly it can affect the market, they should have a plan to deal with this. Another message is to be aware of the growth of Brazil they will continue to focus on China, Hong Kong and the Middle East, but they will also be trying to enter the Japanese and South Korean markets. Their productivity will increase and they will increase their exports also. They may be hindered slightly by their challenges like infrastructure but they will still be a huge competitor for Australia. Image 1: Infrastructure is a challenge. 56 NTCA YEAR IN REVIEW 2016/17
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