Beef Is Becoming a Luxury for Millions in Brazil
· Lower income earners may turn to grains and eggs for protein
· Booming exports are helping push up domestic food prices
By Fabiana Batista and Tatiana Freitas, Bloomberg
June 23, 2020
Living on the outskirts of Cuiaba, Carlos Ferreira is surrounded by cattle grazing on some of the richest pastures in Brazil. Yet he can no longer afford a steak.
The 34-year-old was a regular beef eater. But as the city locked down, he lost his jobs in a florist shop and as an Uber driver. Now he and his unemployed wife have to scrape by with help from the government and relatives.
“Before I lost my job, we could afford to eat steak almost every day,” the physical education graduate said. “Now we have enough for chicken, eggs and sometimes cheap fish.”
With farming land covering an area roughly the size of Texas, Brazil plays an increasingly important role in feeding the world. But as the country becomes a virus epicenter and more than a million formal jobs are lost, more Brazilians like Ferreira are struggling to put food on the table. The impact on consumption behavior may last for years.
The irony is that agribusiness is booming in the country.
Brazil is already the top exporter of soybeans, beef, chicken, sugar, coffee and orange juice. A combination of record crops, strong global demand and a plunge in the local currency means 2020 will be its best year yet. The government expects farming revenue to grow 8.5% to a record 704 billion reais ($136 billion). Helping drive demand is a protein gap after African swine fever decimated China’s hog herd.
But the industry is dominated by large players with a heavy export focus. Shares in meatpackers JBS SA, Minerva SA and Marfrig Global Foods SA have rallied in the past few months along with the local equity benchmark.
“Agribusiness focused on exports is doing great, but the portion of the sector dedicated to the local market is suffering a lot,” Paulo Sousa, who heads Cargill Inc. operations in Brazil, said last week. “It’s clear that consumers are cutting food expenses.”
Access to food in developing nations like Brazil was unequal long before Covid-19. But the pandemic is deepening the chasm and exacerbating food insecurity for low-income earners in the South American country, including 38 million informal workers with little access to credit or state help.
To add insult to injury, food is getting pricier thanks to strong export demand and an initial spate of panic buying when the outbreak hit, the U.S. Department of Agriculture said in a report on Brazil last week. Food was the only category showing inflation in the first four months of the year, according to Brazil’s statistics institute.
Consumption of high-end meat cuts...
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