Brazil was already the biggest beef exporter, shipping meat worth almost $17 billion (C$23.5 billion) in 2025, according to government trade data released on Tuesday. Beef production numbers are not due until February, but analysts have recently raised their estimates. Farmers have been sending more animals to slaughter, cashing in on high export demand from countries including China and the U.S., where low supply has pushed beef prices to record levels.

Production out-performs forecasts

Elevated slaughter typically leads to a period of low output as producers hold back animals to breed and rebuild herds. But productivity gains in Brazil may limit or even prevent a downturn, people in the industry say. They noted that farms have been inseminating cattle quicker, fattening them faster and slaughtering them younger.

“Ten years ago, the average age of cattle slaughtered in Brazil was five years,” said Vinicius Barbosa, a commercial manager responsible for tens of thousands of cattle at the CMA feedlot in Barretos, about 260 miles (420 km) north of Sao Paulo. “Now it is 36 months and going rapidly to 24,” he said.

Mauricio Nogueira, head of livestock consultancy Athenagro, said Brazilian beef production far surpassed his forecast in 2025. Output grew 4 per cent for the year, where he had predicted a 2.7 per cent drop. The increase of around 800,000 tons was about equal to total annual exports of Argentina, the world’s No. 5 beef shipper.

Rabobank, which had expected Brazil’s beef production to decline in 2025, now sees 0.5 per cent growth to 12.5 million tons carcass weight equivalent. The U.S. Department of Agriculture in December raised its estimate for Brazilian beef output by 450,000 tons to 12.35 million tons.

If the official numbers confirm market estimates, 2025 will be the first year that Brazil’s output will have surpassed U.S. production, which fell 3.9 per cent to 11.8 million tons in 2025, according to USDA estimates, following years of drought.

Feedlots, rising carcass weight drive output

U.S. beef production will fall a further 0.9 per cent to 11.7 million tons in 2026, the USDA said. In Brazil, the USDA and Rabobank project a decline in output, but Nogueira said rising productivity could actually boost Brazil’s production by around 300,000 tons.

Almost 28 per cent of cattle slaughtered in Brazil will be fattened in feedlots by 2027, up from 22 per cent in 2025, according to consultants Scot Consultoria.

“Feedlots do in 100 days for cattle what pasture does in between 18 and 24 months,” said Barbosa, adding that CMA’s Barretos feedlot would process 80,000 cattle in 2026, up from 65,000 last year.

Brazil’s booming corn ethanol industry is generating a byproduct known as dried distillers grains that has higher protein than corn and helps cattle fatten faster, analysts said.

Cows are becoming pregnant more often as farmers adopt more efficient insemination techniques, allowing producers to slaughter more animals without reducing herd size.

Scot Consultoria expects Brazil’s pregnancy rate – the proportion of females that become pregnant during a breeding season – to rise to 54 per cent in 2027 from an expected 50 per cent in 2026.

Better genetics are also improving cattle growth and boosting meat quality, analysts say. And Brazil still has not matched the 90 per cent proportion of cattle passing through feedlots as in the U.S., or Australia’s 40 per cent.

If Brazil’s pregnancy rate rose to 66 per cent, equivalent to neighbouring Argentina, the number of calves birthed each year would rise from an estimated 32 million to 40 million, according to consultants Datagro. The pregnancy rate in Canada is 96 per cent, they said.

Government data show Brazil has 238 million cattle, well over double the 94 million in the U.S. Higher productivity would allow output to expand without increasing cattle numbers or the area of pasture land. That could ease one economic driver of deforestation of the Amazon rainforest.

Brazil’s cattle herd is expected to grow just four per cent between 2024 and 2034 while beef production increases 24 per cent, according to Brazilian beef exporter group ABIEC. U.S. beef production will rise 3.5 per cent and cattle numbers will grow five per cent over that period, by USDA estimates.

Brazil key as top producers scale back

Global beef prices will hinge on whether Brazil can avoid a production downturn this year.

The USDA expects output in the world’s six biggest producers to fall in 2026 by a combined 2.4 per cent – the biggest annual drop in decades – after rising 0.4 per cent in 2025. These producers are Brazil, the U.S., China, the European Union, Argentina and Australia. The list excludes India, which the USDA names as one of the six top beef producers even though that country produces buffalo meat rather than beef.

The USDA expects Brazilian production to fall 5.3 per cent to 11.7 million tons carcass weight equivalent this year. If Nogueira’s estimates are confirmed and output rises instead to around 12.6 million tons, the decline in the top six producers would be just 0.2 per cent.

“There has never been so much international demand for Brazilian beef,” said Guilherme Jank, a Datagro analyst, adding that local beef packers have also ramped up capacity.

“We are witnessing firsthand a significant shift in how the beef cattle supply system works in Brazil, in terms of quality, scale, efficiency, and productivity,” he said.

— Additional reporting by Ella Cao in Beijing and Tom Polansek in Chicago

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The soy moratorium agreement bars signatories from buying soybeans grown on Amazonian farms deforested after July 2008.

In an announcement on Monday, Mato Grosso Governor Mauro Mendes said lobby group Abiove informed the state government officially that the association and major traders were leaving the pact. A tax law change on January 1 is a key factor.

Abiove, which includes ADM, Bunge, Cargill, Cofco and Louis Dreyfus among members, confirmed in a subsequent statement it had “initiated talks” to exit the pact, which is backed by the federal government and conservation groups.

The group and about two-thirds of the companies that formerly participated no longer appeared on Monday on the moratorium agreement’s website.

Conservation groups condemn the move

WWF said in a statement that the decision was an environmental setback.

Departure of the firms from the pact “weakens one of the most effective instruments for combating deforestation in the country,” and it exposes farmers to increasing climate risks, WWF said.

Greenpeace also criticized the move, saying it would violate promises made to investors and international markets.

The moratorium is credited with slowing the destruction of the world’s largest rainforest. However, as Reuters reported last week, some of the world’s largest soybean traders were preparing to withdraw from the deal to preserve tax benefits in Mato Grosso, where a new law eliminating the benefits for moratorium participants took force at the start of 2026.

Aprosoja-MT, an association representing farmers in Mato Grosso that had pressured companies for years to end the pact, welcomed the Abiove announcement.

The farmer group called the decision a victory, claiming the moratorium agreement is illegal and unfair to those who comply with the Brazilian Forest Code.

Abiove said companies will be individually responsible for fulfilling their own conservation commitments. “The legacy of monitoring and the expertise acquired over nearly 20 years will not be lost,” it said.

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The firms exiting the so-called Amazon Soy Moratorium, which has saved millions of acres of tropical forest over nearly two decades, are looking to shield themselves from a new state law in Mato Grosso, the sources said on condition of anonymity.

Starting in January, the state will strip tax incentives from companies taking part in the conservation program. Mato Grosso grew some 51 million metric tons of soybeans in 2025, more than Argentina.

A preliminary report from state auditors in April found that grains traders had benefited from tax incentives worth about 4.7 billion reais (C$1.15 billion) between 2019 and 2024.

ADM and Bunge were the top beneficiaries of tax incentives, receiving about 1.5 billion reais (C$368.6 million) each, said Sergio Ricardo, head of the Mato Grosso state audit court.

U.S.-based ADM, Bunge and Cargill, as well as China’s Cofco and Brazil’s Amaggi, are signatories of the pact with facilities in Mato Grosso that have benefited from state tax incentives. It was not clear which of the firms would break immediately from the moratorium.

Cargill referred questions to industry group Abiove, which did not respond to requests for comment. ADM, Bunge, Cofco, Amaggi and grain exporter group Anec did not respond to questions.

“Most companies will choose not to lose the tax incentives and will withdraw from the agreement,” said one of the sources, adding that the departures would effectively end a pact signed in 2006 with the federal government and conservation groups.

‘Dangerous precedent’

The moratorium is considered one of the most important forces slowing deforestation rates in the Brazilian Amazon over the past two decades as it bars signatories from buying soybeans from farmers who plant on land deforested after July 2008.

Researchers estimate that an area of the rainforest the size of Ireland would have been lost to soy farms in Brazil without the moratorium and related conservation efforts, compared to the pace of expansion in neighboring countries such as Bolivia.

The Mato Grosso law, which lawmakers passed in 2023, is the latest example of a global retreat from pacts and policies to curb climate change, even as temperatures break records, driven by rising fossil fuel use and deforestation.

Critics of the soy moratorium say that the pact restricts the market and hurts farmers. Farming groups in Mato Grosso say the protocol reduces the income and economic development of the state.

“Companies could choose to keep their zero-deforestation commitments,” said Cristiane Mazzetti, who oversees the moratorium for Greenpeace. “It’s a dangerous precedent, and it’s not what we need in a moment of climate emergency,” she added.

Brazil’s federal government has argued in court against the new Mato Grosso law stripping tax breaks from traders due to their environmental commitments.

“If the Mato Grosso government really removes those incentives, we have heard that some, or many, companies will in fact abandon the moratorium for economic reasons,” said Andre Lima, a senior Environment Ministry official tasked with combating deforestation. He added that firms had not officially informed the ministry of their plans.

Far-reaching consequences

President Luiz Inacio Lula da Silva has vowed an “ecological transformation” of the Brazilian economy, capped off with the United Nations climate summit hosted in the Amazon last month.

But in domestic politics, his leftist government is often fighting a rearguard battle to protect the world’s largest rainforest from a farm lobby with the upper hand in Congress.

The unraveling of the Amazon Soy Moratorium is likely to embolden those rural powerbrokers and their allies. This year the farm lobby has successfully gutted environmental permitting laws and stripped some protections from Indigenous lands.

The trend has caught the attention of farmer groups in Europe arguing to block a free trade agreement between the European Union and South America’s Mercosur due to the impact of Brazilian agribusiness on vital ecosystems.

Brazil’s Supreme Court has barred some but not all of the farm lobby’s agenda in Congress, based on constitutional protections for the environment and Indigenous peoples.

Environmentalists warn that the end of the soy moratorium could pave the way to dismantle other environmental protections in the world’s largest soybean producer, including part of Brazil’s forestry code restricting farmers from felling trees on 80 per cent of their properties in the Amazon.

Lawsuits

In recent years, soybean farmers pushed state lawmakers in Mato Grosso, Rondonia and Maranhao to strip tax benefits from companies taking part in environmental pacts more restrictive than Brazilian law.

It remains unclear which environmental commitments outside the soy moratorium will trigger those new state laws, which could threaten a range of other companies, including cellulose producers and meatpackers.

Brazilian antitrust agency CADE has separately opened an investigation of the soy moratorium for a potential breach of competition rules. For nearly two decades, trading firms have shared the cost of monitoring soy farms in the Amazon to avoid buying from those planting on newly deforested land.

Starting in January, CADE has ordered traders “to refrain from collecting, storing, sharing, or disseminating commercial information related to the sale, production, or acquisition of soybeans.”

Soy farmers in Mato Grosso have also sued grain traders for roughly $180 million over their role in the pact.

In temporary rulings, Supreme Court Justice Flavio Dino stopped the antitrust investigation, but let the Mato Grosso law take effect. Environmental groups are still trying to block the state law ahead of a final court ruling on the issue.

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The company said third-quarter profit dropped to $581 million (C$815.1 million) from $693 million in the year-ago quarter, citing negative beef margins in the U.S. amid multiyear-low cattle supplies.

Why it matters: Diminished beef cattle herds in North America have led to record-high prices for cattle producers as processors compete to fill demand.

“The industry continues to navigate a challenging cattle cycle, with limited cattle availability for processing,” JBS said in the earnings statement. “With cattle supplies at historically low levels, live cattle prices have remained high, pressuring profitability.”

In remarks about results, CEO Gilberto Tomazoni noted the situation is unlikely to be resolved soon.

JBS’s adjusted earnings before interest, taxes, depreciation and amortization, a measure of operating income known as EBITDA, came in at $1.835 billion (C$2.574 billion), smaller than the $2.153 billion reported a year ago, the company said.

Net sales, however, rose by 13 per cent to $22.6 billion in the third quarter, having grown across all business segments, the company said.

Regarding Brazilian beef operations, JBS reported strong net sales growth, driven mainly by exports and increases in both sales volumes and prices, as well as by higher meat prices in the domestic market.

Tomazoni said that in 2026, Brazil’s cattle herd might be slightly reduced as more female cows were processed compared with male ones in the second quarter.

Brazil, where JBS was founded, is the world’s largest beef exporter. It still boasts the world’s biggest commercial cattle herd.

For its Seara processed foods division, JBS said it posted the highest export volume in history despite temporary trade bans imposed by key importers such as China and Europe due to an avian influenza case in Brazil in May.

The company said those restrictions forced it to redirect certain chicken meat cuts to other markets, which drove a price drop.

The appreciation of the Brazilian currency also negatively affected the company’s meat exports out of Brazil, Tomazoni noted.

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The world’s largest soy producer and exporter is also expected to ship an unprecedented 112.1 million tons to China and other nations, up 5.11 per cent from the previous crop year, the Conab crop agency added.

The U.S., one of Brazil’s main competitors along with Argentina, is expected to export less soy in the coming months.

“With the projected reduction in U.S. exports, the increase in global demand, and the expansion of Brazilian production, significant growth is estimated in Brazilian exports,” Conab said.

In addition, the expectation of an increase in the mandatory blending of biodiesel with diesel, as well as growing demand for vegetable protein, suggests that the volume of soybeans destined for crushing in the domestic market could reach 59.37 million tons in 2026.

Brazilian farmers are also likely to reap a large corn crop despite a projected fall of 5.4 per cent in overall yields.

Brazil will harvest almost 139 million tons of corn in 2025/2026, a 1.6 per cent drop from the previous crop year. Despite the slight fall in total projected corn production, Conab said farmers will increase the country’s corn area by four per cent to 22.72 million hectares (56.142 million acres).

Brazil plants three corn crops each year, with second corn contributing the most output.

In the present crop year, Conab said Brazil’s production of second corn, which is planted after soybeans are harvested in the same areas, will be 110.46 million tons, reflecting strong yields and a 3.8 per cent rise in planted area to 18 million hectares.

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In remarks made after releasing second quarter results, the world’s largest meat company said other factors affecting its U.S. beef operation, which accounts for about a third of its net sales, include the U.S. closure of its border with Mexico in May due to a New World screwworm, a flesh-eating parasite.

“The Mexican situation is obviously relevant,” said Wesley Batista Jr, who leads JBS’ U.S. operations.

The Mexican and the U.S. governments are in talks for potentially reopening the border, he said, estimating around 1.1 million head of feeder cattle cannot go through at this point.

Other operating challenges in the U.S. for the company include the pork business, which has been heavily hit since U.S. President Donald Trump started a trade war with Beijing.

Restrictions on Brazilian chicken exports from China and the European Union, enforced since May after a bird flu outbreak in the world’s largest poultry exporter, are also weighing on JBS, which in June created a dual U.S.-Brazil listing.

CEO Gilberto Tomazoni estimated that if sanitary trade barriers are not removed, earnings before interest, tax, depreciation and amortization (EBITDA) of its Brazil Seara prepared foods division may be impacted by around 1.5 per cent.

Seara’s margins, however, remained in the double digits despite bird flu-related disruptions in the second quarter.

Bolstered also by strong results from JBS’ poultry processor Pilgrims Pride, the firm, now listed in New York, posted record overall net sales of $21 billion (C$29.01 billion) while net profit rose nearly 61 per cent to $528.1 million (C$729.6 billion) in the second quarter.

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The United States is Brazil’s second most important beef products market after China, which is the South American country’s number one importer of the commodity, according to trade data.

Why it matters: The U.S. faces a tight beef market as it recently re-closed the border to Mexican cattle due to New World screwworm concerns. Canadian beef producers may see increased U.S. demand as a result.

“New shipments are under analysis by the private sector due to the increase in tariffs,” Perosa said on Tuesday.

The announcement of the tariffs affected Brazil’s cattle market last week and on Monday, with companies sharply reducing purchases of animals because of the uncertainty related to the tariff announcement, said Alcides Torres, a beef market consultant with Scot Consultoria.

“The market turned cold,” Torres said.

Brazil accounts for some 23 per cent of U.S. beef imports, according to calculations by Genial Investimentos.

Minerva, a listed beef packer in Brazil, derives around five per cent of its net revenue from beef sales to the U.S., the company said after the U.S. announced the imposition of the new tariff from August 1.

The company did not have an immediate comment on the status of its beef shipments to the U.S.

A recent shortage of cattle in the U.S. increased the country’s demand for Brazilian beef imports, trade data shows. According to analysts, the new tariff could make beef more expensive for the U.S. consumer.

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Sao Paulo | Reuters — Brazil is ready to declare the country free of the bird flu virus on commercial flocks, Edivilson Brum, the head of Rio Grande do Sul state’s agriculture department, said on Wednesday in a statement.

Why it matters: Brazil is the largest global exporter of chicken.

The 28-day countdown for reclaiming the country’s disease-free status began on May 22 following the complete disinfection of the farm where Brazil’s only commercial flock outbreak was detected last month.

Under existing trade protocols, China and other importers banned chicken imports from Brazil, the world’s largest exporter, pending measures to control the disease on commercial facilities.

“We have fulfilled all the steps provided for in the health protocols so that Brazil can once again declare itself an influenza-free country to the World Organization for Animal Health,” Brum said, referring to the highly pathogenic avian influenza virus (HPAI).

The Brazilian ministry of agriculture did not have an immediate comment.

Brazil’s first outbreak hit a chicken breeder farm in Brazil’s southernmost state of Rio Grande do Sul last month, triggering trade bans that may now be reversed with the regaining of the disease-free status.

Reclaiming Brazil’s status as free HPAI is not automatic and must be confirmed by the World Organization for Animal Health (WOAH), according to guidelines from the body.

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The outbreak in the world’s largest chicken exporter, detected in the town of Montenegro in the state of Rio Grande do Sul, triggered trade bans from multiple countries.

Why it matters: Brazil, the world’s largest chicken exporter, and is currently banned from exporting poultry to multiple countries due to bird flu cases.

The report from state authorities late on Wednesday that the farm was cleared means that if no other cases of bird flu are detected on Brazilian commercial chicken farms over the next 28 days, the country may be considered free of the disease.

The count starts on Thursday, authorities said.

“We need to ensure that the 28 days of observation occur without new outbreaks,” Agriculture Minister Carlos Favaro said after a meeting with Rio Grande do Sul Governor Eduardo Leite this week. “We are reinforcing actions to ensure that everything is perfectly safe,” he said.

Eleven active investigations into potential bird flu cases in Brazil are ongoing, including two on commercial chicken farms in Santa Catarina and Tocantins states.

On Wednesday, Tocantins state authorities ruled out an outbreak of bird flu in the farm where the investigation was being conducted, citing preliminary test results. However, the federal government is conducting additional tests, according to the agriculture ministry’s website.

Wagner Yanaguizawa, an analyst at Rabobank, said the next few days will be decisive in determining whether the outbreak has been contained.

“After 28 days, if there are no new cases from then on, Brazil can declare itself free of the disease,” he said, adding that it will then be up to the importers to lift existing trade bans.

“But then trade flows will most likely return to normal,” Yanaguizawa said.

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ABPA president Ricardo Santin told Reuters in an interview that rejection of cargoes may vary according to the date of shipment before outbreak’s confirmation, ranging from 14 to 28 days at the discretion of the destination countries’ official veterinary services.

Why it matters: Brazil, the largest exporter of chicken in the world, is the latest in a long line of countries to fall prey to bird flu.

The situation puts meat processors including BRF and JBS in a tight spot, as they deal with additional logistics costs and uncertainty related to the extent of ongoing trade embargos triggered by the health emergency.

Brazil accounts for 39 per cent of the global chicken trade, Santin said, citing fresh trade data.

Mexico, Chile could reject cargoes

Easing restrictions for cargos in transit is a possibility, Santin said, particularly if the cargo comes from a region far from the outbreak in the town of Montenegro, in Rio Grande do Sul state.

“But that will require negotiations,” Santin said. Mexico and Chile are among countries which would also reject cargoes under existing health protocols related to bird flu outbreaks, he added.

It is not possible to calculate losses stemming from export restrictions in force after confirmation of the first bird flu outbreak on a Brazilian commercial chicken farm, Santin said.

That is because the scope and duration of trade bans may vary according to health protocols and negotiations with importing nations, Santin said.

China, for example, enforced a nationwide ban on Brazil’s chicken imports for about three weeks after a case of Newcastle disease – also found in Rio Grande do Sul – last year, Santin said.

Later, China narrowed the scope of the ban to a statewide restriction that currently remains in place.

Brazil’s government asked China to restrict its bird-flu-related embargo on chicken imports to products just from the town of Montenegro, local media reported on Tuesday.

Brazil asks China to revise trade protocols

The agriculture ministry confirmed a request made earlier this month to China to revise existing trade protocols, suggesting implementation of regional rather than countrywide export bans in the event of health emergencies, though denied asking anything specific related to the current bird flu outbreak.

In total, some 20 countries imposed chicken trade bans on Brazil under existing health protocols, the Agriculture Ministry said on Monday.Unlike China, other major importers like Japan, the United Arab Emirates and Saudi Arabia are less strict and enforce regional bans under the existing health emergency protocols.

Santin said it is up to the exporting companies to deal with returned cargoes, adding they also have the possibility of redirecting some consignments.

—Additional reporting by Lisandra Paraguassu in Brasilia

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