25 January 2023

2 minute read

By: Global Ag Media

South America

The announcement this month that one of the biggest beef processing plants in Brazil's Parana state would close, shedding hundreds of jobs, prompted a powerful meat lobby to demand "urgent" measures to support the sector, reported Reuters.

In a statement on Tuesday, Sindicarnes-PR, which represents beef and pork companies, said the demise of privately owned beefpacker Big Boi is the latest blow to the industry, which they claim has been reeling for years.

Sindicarnes-PR blamed higher costs, dwindling cattle supplies, feeble domestic demand and the prospect of a higher tax burden for the sector's woes.

Big Boi is Parana's third-biggest beefpacker. Larger companies, including JBS, also own at least one plant in the state, though it has been idle for years, a spokesman for Sindicarnes-PR said.

Paraná's slaughtering volumes has shrunk from 835,000 cattle head in 2019 to 695,000 head in 2021, a 17% drop, Sindicarnes-PR said citing units that are subject to federal food inspections, Sindicarnes-PR said.

Five years ago, cattle slaughtering at those same plants would exceeded one million head per year.

According to the trade group, things got more complicated after Parana became foot-and-mouth disease free without vaccination. This rose local cattle prices, reduced animal supplies and obliged processors to bring in livestock from faraway farms in Acre and Rondonia -- at prohibitive shipping costs -- because they have the same sanitary status as Parana.

"In 2020 alone, when Parana's sanitary status was upgraded, the exodus of cattle to other states (mainly São Paulo) surpassed 150,000 head," Sindicarnes-PR said.

Parana's share of Brazil's beef and dairy exports fell to 0.8% in 2022 from 1.8% in 2019, the statement said.

But while beef companies scramble, Parana continues to be a prominent pork and chicken processor, a state where companies like BRF SA run large facilities.