February 8, 2012
Brazilian Cattle Ranchers Placing More Cattle in Feedlots
One of the most significant trends in animal agriculture in Brazil in recent years has been the increase in the number of cattle placed in feedlots prior to slaughter. The state of Mato Grosso has the largest cattle heard in Brazil, estimated at 29,193,000 as of the end of 2011. According to the Cattle Producers Association of Mato Grosso (Acrimat), the number of cattle placed on feed in the state increased 29% just in 2011. During last October, it is estimated that 48% of the cattle slaughtered in the state came from the feedlots.
This trend is of critical importance for the corn producers in the state because they want more of their corn consumed within the state instead of paying the extremely high cost of transporting the corn to southern Brazil for the poultry and swine industry. For their part, the livestock producers of southern Brazil rely on corn brought in from Mato Grosso to supplement their own production which is not enough to meet their needs.
Acrimat estimates that the number of cattle on feed in Mato Grosso increased 550% over the last six years. In 2005, 117,880 cattle were on feed and that increased to 763,947 in 2011. Some ranchers were forced to put more cattle on feed because of the extended dry season in 2010 that resulted in many pastures simply dying. The state has approximately 26 million hectares of pastures (that compares to 6.7 million hectares of soybean production) and it is estimated that 2.2 million hectares of pastures died in 2010 (8.5%) as a result of the dry weather. Most of these pastures are in the process of being replanted, but in the meantime, more cattle went to the feedlots.
Many cattle ranchers in Mato Grosso practice what is classified as semi-confinement. These cattle are placed on supplemental feed for 90-120 days during the dry season (May to September) when the pastures are generally very dry. This supplemental nutrition allows the cattle to continue gaining weight during the dry season when they normally would lose weight. A lot of the supplemental feeding takes place right in the pastures with movable feed bunks. When the rains return in September or October, the cattle are returned to the rejuvenated pastures.
The biggest increase in supplemental cattle feeding is occurring where a much of the safrinha corn is produced, which is central Mato Grosso. This trend toward increased numbers of cattle being placed in feedlots, in conjunction with increasing production of hogs and poultry in southern Brazil, is going to be important to the corn and soybean markets in the long run. Increasing domestic demand for corn is going to keep domestic corn prices firm, which in turn will encourage Brazilian farmers to plant more corn. The increased interest in corn production could then limit somewhat the potential expansion of soybean acreage in Brazil. This increasing demand for corn in Brazil is a new dynamic we have to consider when estimating the potential expansion of soybean production in Brazil.