After a first quarter marked by a consistent increase in the value of live cattle, mainly supported by the retention of females and the consequent reduction in meat supply, the sector is beginning to recalibrate expectations in the face of important changes in the dynamics of supply, costs and the external market for the first round of confinement.
The livestock farmer’s intention to confine animals remains firm, driven above all by improved food prices. At the same time, concern is growing about the high prices of animals in younger categories and the behavior of exports and the limits of Chinese quotas for Brazilian beef.
In February, the occupancy rate of confinements was 52.6%, a level considered within normal limits for the rainy season. However, the Cattle Replacement Index reached 1.328, above that recorded in the same period in 2025, when it was 1.227.
This advance indicates that the pace of animal entry is faster this year, gradually increasing the capacity of confinements and signaling a more robust supply of finished cattle from May onwards.
This reading is reinforced by livestock farmer Lorenzo Junqueira, who observes a clear change in market behavior throughout the semester. According to him, the beginning of the year was marked by a firm arroba, supported by the lower availability of animals, but the more intense entry of cattle into the confinement from February onwards should have repercussions from June onwards, when supply tends to increase seasonally.
According to Agromove consultant, Alberto Pessina, the replacement should defy confinement this year. Lean cattle — a young animal, usually a steer or bull, weighing around 195 kg to 200 kg, still in the breeding phase and ready to enter the stage of fattening in confinement — showed strong appreciation and, at certain times, cost between 10% and 20% more than the cost of fat cattle, increasing the cost of entry into the system.
“The tendency is for the calf to follow this upward trajectory, putting even more pressure on the total cost of the operation”, informed Pessina.
In practice, this means that a significant portion of the feeder’s investment is concentrated in purchasing the animal, reducing the margin for maneuver even in an environment with cheaper food. The relationship between production cost and sales price remains quite tight, which requires greater efficiency in management and planning.
Despite this tightness, many producers believe that the moment is still opportune to purchase animals, considering the expectation of relatively firm prices for the arroba throughout the first half of the year. The decision to confine, therefore, requires a careful analysis of the exchange relationship and market opportunities.
Another central factor in this context is , especially for China. Progress in filling Brazilian beef import quotas raises doubts about the pace of purchases throughout the rest of the year.
If these restrictions are intensified, the domestic market may absorb a greater volume of meat, which tends to reduce the momentum for rising prices.
Still, the predominant assessment among analysts and sector agents is that there is little likelihood of a sharp drop in prices. The most likely scenario is stability or more contained increases, supported by supply still adjusted according to female retention.
Food costs
One of the main factors that support the livestock farmer’s decision to invest in confinement in this first round is the relief in feed costs.
Corn and soybean prices are lower compared to the same period last year, favored by good harvests in both Brazil and the United States, which significantly improves the exchange ratio for the feeder.
According to ICAP (Food Cost Index), those in confinement showed different behaviors between the main producing regions at the beginning of the year. In relation to January, there was a 6.04% decline in costs in the Central-West, while an increase of 2.76% was recorded in the Southeast.
In comparison with February 2025, the difference becomes even more evident. The Central-West accumulated a 14.04% drop in food costs, reflecting a more favorable scenario for the feedlot, while the Southeast showed a slight increase of 0.16% in the same period.
According to Ponta Agro, the relief observed in the Center-West is directly linked to the 7.14% reduction in the prices of energy inputs, such as dry grain sorghum and soybean hulls, while dry grain corn remained stable. In the Southeast, the main pressure factor came from the significant increase of 17.3% in roughage costs, which increased the total cost of the diet.
The company highlights that this movement ended up widening the difference in costs between regions again, after a period of greater approximation observed at the end of 2025.
Based on these data, Ponta Agro estimates that the confinement margin in the Center-West has reached R$197.27 per arroba, resulting in a profit of approximately R$1,028 per head. In the Southeast, the cost was calculated at R$215.10 per arroba, with a slightly lower profit of R$1,021 per animal.
Future market
Expectations for the market reflect a scenario of relative stability with a moderate upward bias, although marked by important uncertainties.
Current indications point to prices still being sustained until April and May, in line with the lower supply of ready animals. From June onwards, the increase in the availability of cattle from confinement may limit more significant movements in value.
