After flirt with a 40% rally in mid-2021the price of meat in the accumulated 12 months lost strength and reached, in January, the lowest level since May 2018. The annual variation of just 0.04% is influenced by the drop in the value of noble cuts and is not accompanied by the more traditional and preferred meats for barbecue.
According to IPCA (National Broad Consumer Price Index)calculated by IBGE (Brazilian Institute of Geography and Statistics)the prices of filé-mignon (-12%) it’s yes lamb meat (-10.1%) lead the price declines in the accumulated of the last year.
On the other hand, cuts like rump steak (-0.33%) and the cool (-2.11%) presented a less expressive decrease in the accumulated result of the last 12 months. In the same period, the sirloin steak (+0.65%)a rib (+1.32%)a rump (+1.59%) and the termites (+5.98%) they got more expensive.
Paulo Luives, economist at Valor Investimentos, assesses that the recent slowdown in meat prices stems from the soaring prices over the last few years. “When you move to the following year, the most negative effect is driven by the very high base of 2021”, he points out.
Faced with the highs at the most critical moment of the pandemic, Luives recalls that nobler meats were replaced by other cheaper cuts, who suffered from inflation due to increased consumption. “The lower demand for the noblest pieces due to the very high prices justifies the current reduction”, he analyzes.
Pedro Afonso Gomes, economist and president of the Corecon-SP (Regional Economy Council of São Paulo)explains that the discrepancy between the price of the cuts also happens due to the assessment of producers and intermediaries on the total profit to be obtained from the sale of the ox.
“Sellers check whether they can sell each cut of meat. When you talk about a picanha, which is cheaper, this happened because it had reached a very high price at a certain point. […] It is necessary to adapt prices to consumers”, he says.
Pricing
Gomes, from Corecon-SP, explains that the Meat price formation originates from the creation of the ox and it can be made more expensive by increasing the cost of feeding and maintaining the animal’s health.
“With the reduction in agricultural and industrial production, there was an increase in the cost of raising cattle, which are fed for one or two years before going on to be cut. Today, there is a better harvest and we are in the best period of cattle cutting due to climate, regional and export issues”, evaluates Gomes, citing the greater supply of the product.
According to Gomes, half of the value of the arroba of the ox, currently around R$ 300, is made up of parts that will be available at the butcher shop. The rest is made up of bones, skins and tallow, which can even be sold, but for much lower prices.
In view of the evolution observed in recent months, specialists predict a negative variation in meat prices in the coming months. “I believe that February and March will be marked by new reductions, influenced by the fact that we are in the cattle harvest until April”, reinforces Gomes.
Among the factors that will influence prices from then on, Luives cites the amount of meat to be exported to China at the time of the reopening of the Asian country and the expected increase in protein consumption per inhabitant.