Global Beef Market
Global Beef Market Outlook and China Effect
Adolfo Fontes
November 2015
Agenda
Beef market overview China Effect Exchange rate impacts Latin America comparative advantages Challenges
2
Rabobank is a premier bank to the leading companies across the food, beverage and agribusiness industry Financial solutions to more than 10 million clients in 46 countries Leading Global Bank
Rabobank International
Rabobank International global presence
International Retail Banking Wholesale Banking Corporate Banking
Global Financial Markets
F&A Research
Mergers & Acquisitions
Professional Products/ AF Focus on Food & Agribusiness
Relationship-Focused Rabobank Netherlands
Over 100 years of banking history rooted in the Food & Agri sector
Corporate and Retail banking Asset management
Leasing
Commercial Real Estate
Insurance
Mortgage
Corporates
Safest privately-owned bank, more than USD1 trillion in Assets
All industries
3
Rabobank global research team
4
World population
More food will be needed in
2014 7.2
Bilhões
the first half of this century,
Source: US Department of Commerce, 2014
than it was consumed in the last 7,000 years
5
Globally, poultry is the fastest growing meat and should replace pork as the most consumed animal protein by 2022 Global consumption of meat [ MM tons]
CAGR¹
+1,6% 346
301
2013-2022
76 (22,0%)
+1,4%
Beef
126 (36,4%)
+1,3%
Pork
128 (37,0%)
+1,9%
Poultry
+1,5%
Sheep
+2,6% 254
67 (22,3%)
61 (24,0%)
189 56 (29,6%)
112 (37,2%)
98 (38,6%)
78 (41,3%)
46 (24,3%) 9 (4,8%) 1995
Note 1: Compound annual growth rate Source: Rabobank, OECD, FAO
83 (32,7%)
108 (35,9%)
12 (4,7%)
14 (4,7%)
16 (4,6%)
2005
2013
2022p
6
Latin America represents almost 1/3 of the global beef production Beef production in 2014 (MMt)
Beef production of selected Latin American countries (2014-MMt) Total 59 MMt
9,9
Others 23% India 7%
China 10%
28%
Latin America
2,8 13%
1,8
EU
0,9 19% USA
Source: USDA, Rabobank Analysis
7
Meat per capita consumption per region per year Per capita consumption (kg/year) – 2013
Beef
110
Poultry
34
Pork
10
15
53 13
33
28
36
12
12
Central America and Caribbean
South America
49
41 15
16
7
6
World
28
2
Africa
84
81
North America
68 14 22
31 5 16
10
28 37
32
Asia
19
Europe
Oceania
Per capita consumption (kg/year) 107
98 57
50 10 20
5
13 39
4 2
China Fonte: USDA, FAO, Rabobank
1
India
0
20
Japan
64 13 17 34
South Korea
114 35
39
60
45
46 16
14
25 5
Brazil
Colombia
51
31
38
9 Argentina
62 16
28
USA
15
Mexico 8
9
Rising.....
Urbanization Population
And per capita income
10
As China grows economically, it will not only import grain but also meat Self-sufficiency in animal protein and GDP per capita (1980-2014) 100%
China (including Hong Kong)
Percent self-sufficient in animal protein
90%
80%
70%
Japan Korea
60%
50%
40% $0
$10.000
$20.000
$30.000
$40.000
$50.000
GDP per capita (current prices, US$)
Source: USDA, FAO
11
China will play a key role in the increase of beef imports Major importers – Export opportunities (Beef - MMt) Others
2014
2024
Egypt
1.8
1.8
Russia
South Korea
0.2
0.3
Other Asians
1.0
0.4
0.3
1.2
0.6
USA
Mexico
1.0
0.2
0.6
Hong Kong
0.5
1.3
0.4
China
0.7
0.5
Middle East and North of Africa
6.5
0.8
0.8
1.1
9.1
Additional volume imported annually by 2024 MENA
China
Hong Kong
401
+ 608
384
‘
356
+461
Mexico
309
+218
USA
300
+ 197
Source: USDA, Rabobank Analysis
Additional 2.6 million tons of Beef will be imported annually through 2024. China, together with Hong Kong will be responsible for 740 thousand tons per year
12
China’s eventual “New Normal” of richer and slower growth China’s GDP per capita at US$7,500 US$13,500 (PPP)
China GDP Growth 2007-2020E 16%
14%
12%
10%
8%
6%
4%
2% GDP per capita
Sources: China National Bureau of Statistics, IMF April 2015
2020E
2019E
2018E
2017E
2016E
2015E
2014
2013
2012
2011
2010
2009
2008
2007
0%
> US$ 10,000 US$ 5000 – 10000 < US$ 5000
13
China’s continuing urbanization and “urbanized” rural migrant China’s cities will gain 182+ million consumers in the next 10 years bringing the urban share to ~70% China’s population forecast
Urbanization rate by province
Millions of inhabitants
1.600
1.400 Heilongjiang
Next phase of regional urbanization and Jilin
1.200 1.000
36.2%
47.0%
55.4% Xinjiang Inner Mongolia
800
15.8%
Shaanxi
13.9%
Tianjin Hebei
Shanxi Shandong
Gansu Tibet
Jiangsu
Henan Hubei
48.0% 200
Shanghai
Anhui
Sichuan Chongqing
400
Zhejiang Jiangxi
38.3%
30.7%
0
Guizhou
Urbanization Rate 60%
Source: China Statistics Yearbook, Rabobank
14
Income growth drives proteinization and safety demands Urban per capita consumption difference by income (kg)
Urban per capita expenditure on food (RMB) 1.600
30.000 Pork
1.400 25.000
Beef
1.200
Mutton 1.000
20.000
Eggs
800 15.000
600
Milk Milk Powder
400 10.000
Yogurt
200 Liquor
Urban disposable income per capita
Eating out
Animal protein
Fruits&vegetables
Food
Aquatic product
Grease
Dairy
2013*
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
5.000
2000
0
Fruit Wine
Beer Tea 0
5 Top 10%
10
15
20
25
Bottom 10%
Source: China Statistics Yearbook, Rabobank
15
Key Themes for China beef
• Low female cattle stock • Long production cycle • Agricultural land and grassland constraints • Environment law
• Rising income and Westernization drive up demand • Market segmentation is emerging
• Rising reliance on imports • Price volatile and determined by suppliers
Supply
Trade
Markets
Global market
• Highly consolidated in major production countries • Tight supply in foreseen future 16
China beef consumption remains low and is dominated by eating out 2014 Beef per capita consumption
Hot pot led food service growth 2014
kg
20,00%
70
60 15,00% 50 10,00%
40
30
5,00%
20
Source: China National Bureau of Statistics, IMF, China Food Service Report, 2015
Western restaurants
hot pot
Quick Service Restaurants
-10,00%
middle end restaurants
-5,00%
high end restaurant
China
Taiwan
Singapore
Japan
South Korea
European Union
Russia
New Zealand
Canada
Australia
U.S.
Brazil
Argentina
0
food service in total
0,00% 10
17
Declining cattle herd despite government support China Cattle Inventory 1995-2013 140
130
120
110
100
Inventory (million) 95-05 Average=119.0
90
2006-2014 Average
80
70
60
50 1995
1996
1997
1998
1999 2000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
2011
2012
2013
2014
18
Beef will increasingly rely on imports
Beef Imports from Major Countries ‘000 Tons
180 160 140 120 100 80 60
40 20 0 2009
2010 Australia
Source: China Customs, Rabobank, 2014 Source: China National Bureau of Statistics, IMF, China Food Service Report, 2015
2011 Uruguay
2012 New Zealand
2013 Argentina
2014 Canada
19
Import will take up 20% by 2018 Imported beef will account for 20% by 2018 Million Tons
10 9 8 7 6 5 4 3 2 1
Domestic Production
Smuggling Imports
2018(E)
2017(E)
2016(E)
2015(E)
2014(E)
2013
2012
2011
2010
2009
2008
0
Official Imports
20
Official import continues to grow in 2015 Beef imports by countries tonnes 50.000 45.000 40.000 35.000 30.000 25.000 20.000
15.000 10.000 5.000 0
Australia Argentina
Uruguay Canada
New Zealand Costa Rica
Brazil Namibia
21
Exchange rate impacts... 3
2 140
1
Global price USD
Global price index in local currency for exporters
120
100
80
USD
3 160
BRL
Índice de exportadores
Global price index in local currency for importers
140
120
2
100
80
60
USD
Índice de importadores
22
Exchange rate in Brazil BRL/USD 4,00 3,60 3,20 2,80 2,40 2,00 1,60
Jul/10
Oct/15
0,57 USD/BRL
0,26 USD/BRL
1,20
Devaluation ~55%
0,80
Jan-06
Jan-07
Source: Bloomberg, 2015
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16 23
Exchange rate in Colombia COP/USD 3.100 3.000 2.900 2.800 2.700 2.600 2.500 2.400 2.300 2.200 2.100 2.000 1.900 1.800 1.700
Jul/10
1.600
Oct/15 Devaluation ~34%
1.500 1.400
Jan-06
Jan-07
Source: Bloomberg, 2015
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16 24
Exchange rate in China CNY/USD 8,4
8,0
7,6
7,2
Valuation ~7%
6,8
Oct/15 6,4
Jan-06
Jul/10
Jan-07
Source: Bloomberg, 2015
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16 25
Beef 220
240
Global price index in USD
Importers
Global price index in local currency for exporters / importers 200
220
Range min – max Global price index in local currency for Brazil
200
180 180
Exporters
160
160
140
Index: Jan 14 = 100
Index: Jan 14 = 100
140
120
100
80
120
100
80
USD
Source: Rabobank, 2015
BRL
Exports index
USD
Imports index 26
Beef 220
240
200
220
200
180 180
160 160
140 140
120 120
100
100
80
80
USD
Source: Rabobank, 2015
BRL
Exports index
USD
Imports index 27
Latin America Comparative Advantages
28
LA has considerable scope to expand food and feed production World: new land available for rain-fed agriculture Global demand for agricultural commodities is rising
[million hectares]
as a result of increasing population and rising real
incomes Although part of the need for greater output can be
Sub-Saharan Africa
95
Latam/Caribbean
94
107
29
achieved by raising productivity, new land will
nevertheless be required for agriculture in the future The distribution of such resources is hard to evaluate,
44
E Europe/C Asia
S & E Asia
7
3 11 Good logistics
but it is certainly uneven around the world. Nevertheless, it is clear that Latin America, and
ME/N Africa
Bad logistics
0 3
specifically Brazil, holds a substantial part of the world’s unused agricultural land
Source: World Bank, 2010
RoW
25
28
29
Water availability
Use of water and availability
Source: Harvard Business School
30
Global beef costs and productivity – Agri benchmark 2013 beef cattle slaughter rate
Beef production cost in select countries¹ China
788
Feedlot
USA
435
Argentina
375
Australia
381
Mexico
341
Colombia
337
Brazil
336
40%
China
36%
U.S.
33%
Canada EU
32%
Russia
32% 27%
Australia
26%
Uruguay
UK
1,090
Australia
578
Pasture
India
534
Colombia Argentina Uruguay Brazil
480 458 425 407
Animal purchase
Land costs
Feed related costs
Other costs
Source: Agri benchmark, 2015 Note 1: Cost in USD per 100 kgs of carcass weight
24%
Argentina
23%
Mexico New Zealand
22%
Egypt
22% 21%
Venezuela
20%
Brazil India
12%
[heads slaughtered per year on a percentage of the total]
31
Degraded pastures = unrealized potential
32
Integrated Livestock/cropping/forestry systems… Example of crop rotation focusing on recovering degraded pastures
Summer
Winter
Eucalyptus plantation simultaneously *
Summer
Winter
Planting maize intercropped with grass
Summer
Due to shading by the forest, grass suffers less from moisture stress
Example
2,4 a 4,8 AU/ha
Implantation in a degraded area
Rice
Corn
Soybeans
Corn
Winter
1,2 a 2,4 AU/ha**
Pasture with rotational system 40 days after the corn harvest, cattle grazing can begin
Soil recovery
Year 1
Year 2
Year 3
•Planting lines in the east / west **Considering 80% pasture and 20% of forest
Source: Rabobank, 2014
33
Degraded pastures = unrealized potential
34
Price forecast: CBOT Corn Corn price forecast almost unchanged with harvest progressing and farmers storing crops. Corn
unit USc/bu
Q1'15 385
Q2'15 365
Q3'15 382
Q4'15(f) Q1'16(f) Q2'16(f) Q3'16(f) Q4'16(f) 380 410 420 410 390
800
750 700
USc / bushel
650 600 550 500 450 400 350
300
CBOT Corn Source: Bloomberg, Rabobank, 2015
Previous forecast
Rabobank forecast 35
Price forecast: CBOT Soybeans Price forecast for soybeans maintained. Soybeans
unit USc/bu
Q1'15 990
Q2'15 963
Q3'15 947
Q4'15(f) Q1'16(f) Q2'16(f) Q3'16(f) Q4'16(f) 890 905 920 925 900
1,650
USc / bushel
1,550 1,450 1,350 1,250
1,150 1,050
950 850
CBOT Soybeans
Previous forecast
Rabobank forecast
Source: Bloomberg, Rabobank, 2015 36
Updates
37
Challenges
38
Gracias! [email protected]
39
39
Adolfo Fontes
November 2015
Agenda
Beef market overview China Effect Exchange rate impacts Latin America comparative advantages Challenges
2
Rabobank is a premier bank to the leading companies across the food, beverage and agribusiness industry Financial solutions to more than 10 million clients in 46 countries Leading Global Bank
Rabobank International
Rabobank International global presence
International Retail Banking Wholesale Banking Corporate Banking
Global Financial Markets
F&A Research
Mergers & Acquisitions
Professional Products/ AF Focus on Food & Agribusiness
Relationship-Focused Rabobank Netherlands
Over 100 years of banking history rooted in the Food & Agri sector
Corporate and Retail banking Asset management
Leasing
Commercial Real Estate
Insurance
Mortgage
Corporates
Safest privately-owned bank, more than USD1 trillion in Assets
All industries
3
Rabobank global research team
4
World population
More food will be needed in
2014 7.2
Bilhões
the first half of this century,
Source: US Department of Commerce, 2014
than it was consumed in the last 7,000 years
5
Globally, poultry is the fastest growing meat and should replace pork as the most consumed animal protein by 2022 Global consumption of meat [ MM tons]
CAGR¹
+1,6% 346
301
2013-2022
76 (22,0%)
+1,4%
Beef
126 (36,4%)
+1,3%
Pork
128 (37,0%)
+1,9%
Poultry
+1,5%
Sheep
+2,6% 254
67 (22,3%)
61 (24,0%)
189 56 (29,6%)
112 (37,2%)
98 (38,6%)
78 (41,3%)
46 (24,3%) 9 (4,8%) 1995
Note 1: Compound annual growth rate Source: Rabobank, OECD, FAO
83 (32,7%)
108 (35,9%)
12 (4,7%)
14 (4,7%)
16 (4,6%)
2005
2013
2022p
6
Latin America represents almost 1/3 of the global beef production Beef production in 2014 (MMt)
Beef production of selected Latin American countries (2014-MMt) Total 59 MMt
9,9
Others 23% India 7%
China 10%
28%
Latin America
2,8 13%
1,8
EU
0,9 19% USA
Source: USDA, Rabobank Analysis
7
Meat per capita consumption per region per year Per capita consumption (kg/year) – 2013
Beef
110
Poultry
34
Pork
10
15
53 13
33
28
36
12
12
Central America and Caribbean
South America
49
41 15
16
7
6
World
28
2
Africa
84
81
North America
68 14 22
31 5 16
10
28 37
32
Asia
19
Europe
Oceania
Per capita consumption (kg/year) 107
98 57
50 10 20
5
13 39
4 2
China Fonte: USDA, FAO, Rabobank
1
India
0
20
Japan
64 13 17 34
South Korea
114 35
39
60
45
46 16
14
25 5
Brazil
Colombia
51
31
38
9 Argentina
62 16
28
USA
15
Mexico 8
9
Rising.....
Urbanization Population
And per capita income
10
As China grows economically, it will not only import grain but also meat Self-sufficiency in animal protein and GDP per capita (1980-2014) 100%
China (including Hong Kong)
Percent self-sufficient in animal protein
90%
80%
70%
Japan Korea
60%
50%
40% $0
$10.000
$20.000
$30.000
$40.000
$50.000
GDP per capita (current prices, US$)
Source: USDA, FAO
11
China will play a key role in the increase of beef imports Major importers – Export opportunities (Beef - MMt) Others
2014
2024
Egypt
1.8
1.8
Russia
South Korea
0.2
0.3
Other Asians
1.0
0.4
0.3
1.2
0.6
USA
Mexico
1.0
0.2
0.6
Hong Kong
0.5
1.3
0.4
China
0.7
0.5
Middle East and North of Africa
6.5
0.8
0.8
1.1
9.1
Additional volume imported annually by 2024 MENA
China
Hong Kong
401
+ 608
384
‘
356
+461
Mexico
309
+218
USA
300
+ 197
Source: USDA, Rabobank Analysis
Additional 2.6 million tons of Beef will be imported annually through 2024. China, together with Hong Kong will be responsible for 740 thousand tons per year
12
China’s eventual “New Normal” of richer and slower growth China’s GDP per capita at US$7,500 US$13,500 (PPP)
China GDP Growth 2007-2020E 16%
14%
12%
10%
8%
6%
4%
2% GDP per capita
Sources: China National Bureau of Statistics, IMF April 2015
2020E
2019E
2018E
2017E
2016E
2015E
2014
2013
2012
2011
2010
2009
2008
2007
0%
> US$ 10,000 US$ 5000 – 10000 < US$ 5000
13
China’s continuing urbanization and “urbanized” rural migrant China’s cities will gain 182+ million consumers in the next 10 years bringing the urban share to ~70% China’s population forecast
Urbanization rate by province
Millions of inhabitants
1.600
1.400 Heilongjiang
Next phase of regional urbanization and Jilin
1.200 1.000
36.2%
47.0%
55.4% Xinjiang Inner Mongolia
800
15.8%
Shaanxi
13.9%
Tianjin Hebei
Shanxi Shandong
Gansu Tibet
Jiangsu
Henan Hubei
48.0% 200
Shanghai
Anhui
Sichuan Chongqing
400
Zhejiang Jiangxi
38.3%
30.7%
0
Guizhou
Urbanization Rate 60%
Source: China Statistics Yearbook, Rabobank
14
Income growth drives proteinization and safety demands Urban per capita consumption difference by income (kg)
Urban per capita expenditure on food (RMB) 1.600
30.000 Pork
1.400 25.000
Beef
1.200
Mutton 1.000
20.000
Eggs
800 15.000
600
Milk Milk Powder
400 10.000
Yogurt
200 Liquor
Urban disposable income per capita
Eating out
Animal protein
Fruits&vegetables
Food
Aquatic product
Grease
Dairy
2013*
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
5.000
2000
0
Fruit Wine
Beer Tea 0
5 Top 10%
10
15
20
25
Bottom 10%
Source: China Statistics Yearbook, Rabobank
15
Key Themes for China beef
• Low female cattle stock • Long production cycle • Agricultural land and grassland constraints • Environment law
• Rising income and Westernization drive up demand • Market segmentation is emerging
• Rising reliance on imports • Price volatile and determined by suppliers
Supply
Trade
Markets
Global market
• Highly consolidated in major production countries • Tight supply in foreseen future 16
China beef consumption remains low and is dominated by eating out 2014 Beef per capita consumption
Hot pot led food service growth 2014
kg
20,00%
70
60 15,00% 50 10,00%
40
30
5,00%
20
Source: China National Bureau of Statistics, IMF, China Food Service Report, 2015
Western restaurants
hot pot
Quick Service Restaurants
-10,00%
middle end restaurants
-5,00%
high end restaurant
China
Taiwan
Singapore
Japan
South Korea
European Union
Russia
New Zealand
Canada
Australia
U.S.
Brazil
Argentina
0
food service in total
0,00% 10
17
Declining cattle herd despite government support China Cattle Inventory 1995-2013 140
130
120
110
100
Inventory (million) 95-05 Average=119.0
90
2006-2014 Average
80
70
60
50 1995
1996
1997
1998
1999 2000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
2011
2012
2013
2014
18
Beef will increasingly rely on imports
Beef Imports from Major Countries ‘000 Tons
180 160 140 120 100 80 60
40 20 0 2009
2010 Australia
Source: China Customs, Rabobank, 2014 Source: China National Bureau of Statistics, IMF, China Food Service Report, 2015
2011 Uruguay
2012 New Zealand
2013 Argentina
2014 Canada
19
Import will take up 20% by 2018 Imported beef will account for 20% by 2018 Million Tons
10 9 8 7 6 5 4 3 2 1
Domestic Production
Smuggling Imports
2018(E)
2017(E)
2016(E)
2015(E)
2014(E)
2013
2012
2011
2010
2009
2008
0
Official Imports
20
Official import continues to grow in 2015 Beef imports by countries tonnes 50.000 45.000 40.000 35.000 30.000 25.000 20.000
15.000 10.000 5.000 0
Australia Argentina
Uruguay Canada
New Zealand Costa Rica
Brazil Namibia
21
Exchange rate impacts... 3
2 140
1
Global price USD
Global price index in local currency for exporters
120
100
80
USD
3 160
BRL
Índice de exportadores
Global price index in local currency for importers
140
120
2
100
80
60
USD
Índice de importadores
22
Exchange rate in Brazil BRL/USD 4,00 3,60 3,20 2,80 2,40 2,00 1,60
Jul/10
Oct/15
0,57 USD/BRL
0,26 USD/BRL
1,20
Devaluation ~55%
0,80
Jan-06
Jan-07
Source: Bloomberg, 2015
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16 23
Exchange rate in Colombia COP/USD 3.100 3.000 2.900 2.800 2.700 2.600 2.500 2.400 2.300 2.200 2.100 2.000 1.900 1.800 1.700
Jul/10
1.600
Oct/15 Devaluation ~34%
1.500 1.400
Jan-06
Jan-07
Source: Bloomberg, 2015
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16 24
Exchange rate in China CNY/USD 8,4
8,0
7,6
7,2
Valuation ~7%
6,8
Oct/15 6,4
Jan-06
Jul/10
Jan-07
Source: Bloomberg, 2015
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16 25
Beef 220
240
Global price index in USD
Importers
Global price index in local currency for exporters / importers 200
220
Range min – max Global price index in local currency for Brazil
200
180 180
Exporters
160
160
140
Index: Jan 14 = 100
Index: Jan 14 = 100
140
120
100
80
120
100
80
USD
Source: Rabobank, 2015
BRL
Exports index
USD
Imports index 26
Beef 220
240
200
220
200
180 180
160 160
140 140
120 120
100
100
80
80
USD
Source: Rabobank, 2015
BRL
Exports index
USD
Imports index 27
Latin America Comparative Advantages
28
LA has considerable scope to expand food and feed production World: new land available for rain-fed agriculture Global demand for agricultural commodities is rising
[million hectares]
as a result of increasing population and rising real
incomes Although part of the need for greater output can be
Sub-Saharan Africa
95
Latam/Caribbean
94
107
29
achieved by raising productivity, new land will
nevertheless be required for agriculture in the future The distribution of such resources is hard to evaluate,
44
E Europe/C Asia
S & E Asia
7
3 11 Good logistics
but it is certainly uneven around the world. Nevertheless, it is clear that Latin America, and
ME/N Africa
Bad logistics
0 3
specifically Brazil, holds a substantial part of the world’s unused agricultural land
Source: World Bank, 2010
RoW
25
28
29
Water availability
Use of water and availability
Source: Harvard Business School
30
Global beef costs and productivity – Agri benchmark 2013 beef cattle slaughter rate
Beef production cost in select countries¹ China
788
Feedlot
USA
435
Argentina
375
Australia
381
Mexico
341
Colombia
337
Brazil
336
40%
China
36%
U.S.
33%
Canada EU
32%
Russia
32% 27%
Australia
26%
Uruguay
UK
1,090
Australia
578
Pasture
India
534
Colombia Argentina Uruguay Brazil
480 458 425 407
Animal purchase
Land costs
Feed related costs
Other costs
Source: Agri benchmark, 2015 Note 1: Cost in USD per 100 kgs of carcass weight
24%
Argentina
23%
Mexico New Zealand
22%
Egypt
22% 21%
Venezuela
20%
Brazil India
12%
[heads slaughtered per year on a percentage of the total]
31
Degraded pastures = unrealized potential
32
Integrated Livestock/cropping/forestry systems… Example of crop rotation focusing on recovering degraded pastures
Summer
Winter
Eucalyptus plantation simultaneously *
Summer
Winter
Planting maize intercropped with grass
Summer
Due to shading by the forest, grass suffers less from moisture stress
Example
2,4 a 4,8 AU/ha
Implantation in a degraded area
Rice
Corn
Soybeans
Corn
Winter
1,2 a 2,4 AU/ha**
Pasture with rotational system 40 days after the corn harvest, cattle grazing can begin
Soil recovery
Year 1
Year 2
Year 3
•Planting lines in the east / west **Considering 80% pasture and 20% of forest
Source: Rabobank, 2014
33
Degraded pastures = unrealized potential
34
Price forecast: CBOT Corn Corn price forecast almost unchanged with harvest progressing and farmers storing crops. Corn
unit USc/bu
Q1'15 385
Q2'15 365
Q3'15 382
Q4'15(f) Q1'16(f) Q2'16(f) Q3'16(f) Q4'16(f) 380 410 420 410 390
800
750 700
USc / bushel
650 600 550 500 450 400 350
300
CBOT Corn Source: Bloomberg, Rabobank, 2015
Previous forecast
Rabobank forecast 35
Price forecast: CBOT Soybeans Price forecast for soybeans maintained. Soybeans
unit USc/bu
Q1'15 990
Q2'15 963
Q3'15 947
Q4'15(f) Q1'16(f) Q2'16(f) Q3'16(f) Q4'16(f) 890 905 920 925 900
1,650
USc / bushel
1,550 1,450 1,350 1,250
1,150 1,050
950 850
CBOT Soybeans
Previous forecast
Rabobank forecast
Source: Bloomberg, Rabobank, 2015 36
Updates
37
Challenges
38
Gracias! [email protected]
39
39
