Crisis Paralyzes Beef Market in Brazil

03/22/2017 - 11h47

A different and historical day. Monitoring the prices of beef market for the last 27 years, Sérgio De Zen, a researcher at Cepea (Center for Advanced Studies on Applied Economics) and professor at Esalq (Luiz de Queiroz College of Agriculture), University of São Paulo, had never experienced a situation like the one on Tuesday (21): negotiations completely hampered.

Yesterday, was difficult to even establish the price for the beef market in the country; Not even October 2005, when the meat market suffered a heavy blow due to the foot in the mouth disease crisis in Mato Grosso do Sul, compares to the current paralysis.

Zen says the country is experiencing an information crisis: "Is not possible to explain what happened or the extent of what is happening. There is huge misinformation."

And this information crisis is not limited to the internal market. In recent days, the researcher has been approached by leading international news agencies, including Al Jazeera, which focuses on the Middle East.

In his evaluation, we have problems. In the last 15 years, the inspection system has not evolved. But the country still has everything to change. "You have to rethink the [inspection] structure, and society has to demand it."

For Zen, the initial step in the Operation Carne Fraca ("Poor Meat") is to clarify the breadth of the problem. Then, to punish the guilty.

Finally, to build a work model, including independent management. Society must participate with the government, but without political interference.

The market situation has become so uncertain that slaughterhouses will reduce the scale of slaughtering in the coming days. Five of the countries that stopped receiving Brazilian beef - Chile, China, Hong Kong, Egypt and Algeria - accounted for 55% of the country's exports in 2016.

With this, the meat destined for these countries should be placed on the domestic market.
One of the internal effects of the operation was the fall in the price of beef.

The average prices surveyed by Cepea on Tuesday indicated R$ 142.6 (US$ 45,8) per 14.69 kg ("arroba"), against R$ 145.1 (US$ 46) the day before.

The situation in poultry and swine farming is different. When it reaches the ideal slaughtering period - close to 42 days - the chicken cannot fail to be slaughtered, since it no longer qualifies to the specificities of the market. In addition, the cost of production increases. In the case of pigs, there is a possibility of redistribution, but small.

Translated by MARINA DELLA VALLE

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