Brazilian cattle farming operates at its own pace, marked by decisions that take years to be reflected in the market. Unlike other production chains, where adjustments to supply can be made quickly, beef production depends on a long process, which involves reproduction, breeding, rearing and fattening of animals.
Between the decision to retain a cow for breeding and the moment the calf reaches slaughter weight, the interval can exceed up to 36 months.
This mismatch between decision and result creates so-called slaughter cycles.recurring movements that help explain fluctuations in the prices of live cattle, retail meat and, ultimately, food inflation in the country.
These cycles are mainly determined by the behavior of the slaughter of females.
Cows and heifers are responsible for replacing the herd and play a central role in supply dynamics.
According to data released by IBGE (Brazilian Institute of Geography and Statistics), on average, females represent between 40% and 50% of the total number of animals slaughtered in Brazill, percentage that varies depending on the phase of the livestock cycle.
According to studies by Embrapa (Brazilian Agricultural Research Corporation), livestock cycles are structural and inherent to the activity, a direct result of the long biological term necessary to rebuild the herd.
In Brazil, these cycles usually last between six and eight years, but can be shortened or prolonged by external factors, such as weather, production costs and demand.
Prolonged droughts tend to accelerate the culling of animals, while periods of regular rain and abundant pasture favor the retention and expansion of the herd..
According to IBGE, the national herd currently has 230 million headsbeing the largest in the world.
Discharge phase
The cycle generally begins in a period of high cattle prices. With greater profitability for producers who tend to retain females for reproduction, reducing the sending of these animals to slaughterhouses.
This movement limits the supply of meat in the short term and supports prices at higher levels.
In retail, this increase is directly reflected in the group Food and Drinks of the IPCA (Broad National Consumer Price Index).
The beef twith a relevant weight in the index, 2.74% overall and, in high cycles, it tends to exert significant pressure on inflation, especially in periods of more restricted family incomes.
At the same time, the expectation of high prices encourages investments in genetics, technology and intensification of production systems.
However, the effects of these decisions only appear years later, as the complete production cycle — from gestation to slaughter — can take two to four years.
Bearish phase
As the cycle progresses, the greater number of animals generated in the previous phase begins to reach the market.
Supply increases and beef cattle prices begin to lose strength, meaning the meat tends to become more accessible to consumers.
At this time, producers increase the slaughter of females to adjust costs or generate cash, further increasing the availability of meat in the short term.
This movement tends to contribute to the slowdown in retail prices and can act as a relief factor for food inflation.
Historically, periods of greater beef supply help contain the IPCA, reducing inflationary pressures and influencing the macroeconomic scenario.
However, the excessive disposal of matrices compromises future production, setting the stage for a new phase of shortages and rising prices a few years ahead.
External demand
In addition to biological factors, the international market exerts a growing influence on livestock cycles.
According to Abiec (Brazilian Association of Meat Exporters), 25% to 30% of Brazilian beef production is exported, with China concentrating more than half of foreign purchases.
When international demand is strong, pressure on domestic supply increases, even in phases of greater production.
This limits the effect of falling prices on the domestic market and reinforces the impact of livestock farming on food inflation.
