With the world's largest commercial cattle herd — estimated at 180-190 million head — cow numbers in Brazil have grown by 5 million head/year the past decade.
But there are signs growth is slowing, due largely to competition for the better agricultural land. Exploding ethanol production has Brazilian farmers converting cattle pasture to sugar cane at warp speed. It's projected that by 2009 in the state of Sao Paulo nearly 2 million acres of prime cattle pasture will be converted to sugar cane for the 90+ ethanol plants soon due on line in that state alone.
Brazil has 180-200 million acres of land that could be developed for grazing systems. But much of that vast resource lies in the drier, remote east-central, subtropical brushland where clearing, seeding to improved forages, water development and fencing is necessary.
The limiting competitive factor throughout South America is foot-and-mouth disease (FMD). Uruguay (with 12 million head) is the continent's only major beef-producing nation with FMD-free status (with vaccination) and freedom to export globally.
Brazil and Argentina (56 million head) are shut out of North American and most Asian fresh beef markets due to FMD. Most observers feel that until the disease is controlled continent-wide, Brazil and Argentina are hamstrung.
Of Uruguay's beef production, 80% is exported — with 75% of that going to North America. Like Brazil and Argentina, anabolics, growth-promoting feed additives and animal proteins in feed are banned.
In 2004 and 2005, U.S. beef imports from Uruguay jumped significantly as that country joined the competition for the U.S. manufacturing beef market. In fact, Uruguayan imports almost totally replaced Canadian imports of manufacturing beef into the U.S. after BSE closed that trade in May 2003.
U.S. beef imports from Uruguay declined in 2006 as Uruguay began selling to other countries formerly supplied by Brazil and Argentina, whose exports were reduced due to disease-related problems and internal political and economic issues.
Neither Brazil nor Uruguay has a significant grain-based, cattle-feeding industry. But in Argentina, grain feeding has grown steadily, with the majority of cattle being fed corn today in hybridized systems with grass pasture for 90-120 days before slaughter.
Argentina has a small feedlot sector where about 100 facilities supply 300,000 of the country's 13 million slaughter annually. Cactus Feeders' 25,000-head feedlot — a joint venture with Tyson Foods and a local company — is one of Argentina's largest feedlots.
The price of beef represents more than 4% of the Argentine consumer price index. In efforts to fight inflation (and ensure re-election this fall), President Nestor Kirchner implemented a series of “cheap food” policies. One of his first moves to increase domestic beef supplies and decrease domestic prices was to limit exports through a complicated set of export quotas and taxes. The government then set maximum feeder and slaughter cattle prices, and minimum cattle slaughter weights. Then it capped wholesale and retail beef prices for a dozen of the more popular beef cuts.
North American snapshot
Canadian imports of boneless beef from cattle under 30 months of age resumed into the U.S. in August 2003. In July 2005, imports resumed of Canadian cattle less than 30 months of age for immediate slaughter or for finishing in a U.S. feedlot.
Last year, USDA proposed restarting imports of Canadian cattle over 30 months of age, but it temporarily withdrew the rule after Canadian officials discovered BSE in a 50-month-old, Alberta dairy cow born well after Canada's feed ban was initiated in 1997. On Jan. 9, 2007, USDA published a proposal in the Federal Register to revise its rules to allow imports of some live animals over 30 months of age and their meat products from countries recognized as presenting a minimal risk of introducing BSE into the U.S. Canada currently is the only minimal-risk country designated by the U.S.
With the loss of its Pacific Rim markets due to BSE, Mexico has been the top export destination for U.S. beef since 2004. The increase in fed-beef demand in Mexico offers opportunity to its fledgling feedlot sector, but those feedlots must compete for forage and feed grain resources against other sectors — dairy, pork and poultry. Less than one-third of Mexico's beef production comes from feedlot operations.
Strong U.S. cattle prices continue to attract lightweight Mexican feeder cattle — at about 1.2 millon head/year. Cattle imports from the state of Coahuila were halted in April 2007. This suspension will remain in effect until USDA has determined the Mexican state is in compliance with tuberculosis program guidelines.