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June 15, 2012

Number of Cattle-on-feed in Brazil Continues to Increase

Over the past decade, the number of cattle-on-feed in Brazil has grown steadily and in 2011 an estimated 7.2% of the cattle slaughtered in Brazil came out of feedlots. That is expected to increase to 8.5% in 2012. While the number of cattle in the feedlots is still very small compared to the total herd in Brazil, the trend is expected to continue in the coming years. The highest concentration of cattle-on-feed are in the state of Goias, Mato Grosso, and Sao Paulo and most of those cattle come to market during the second half of the year.

The reason why most cattle come out of the feedlot during the second semester is due to the weather patterns in Brazil. Most of central Brazil has a distinct rainy season and dry season. The rains generally end in April or May and then the weather is warm and dry until September or October. During this time the pastures dry out and most grass-fed cattle lose weight before the returning rains can regenerate pasture growth later in the year.

To avoid this weight loss, the cattle are placed in the feedlots when the pastures dry out and then they are ready for market during the second half of the year.

Feedlot operations are also becoming more popular because of the increase in corn production in Brazil. Approximately half of Brazil's corn production is now produced as a second crop after soybeans (called safrinha corn) with Mato Grosso being the number one safrinhaJ corn producing state, which makes it a corn surplus state. Mato Grosso also has the largest cattle herd in Brazil at nearly 30 million head, so putting cattle on feed in the state has been a natural evolution. It is much more cost effective shipping out processed beef than it is a bushel of corn.