Media Release
April 8, 2008
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Australia and Brazil vital in supplying world beef needs
The CEO of one of Brazil’s largest beef processing companies sees global beef
demand continuing to increase with Australia well positioned to meet this growth.
Brazil has positioned itself as the world newest beef powerhouse. With a national herd of 210 million
head and growing - Brazil can not be ignored. But according to Fernando Galletti de Queiroz, chief
executive officer of Minerva, the fourth largest meat processor and third largest exporter in Brazil -
there is plenty of marketshare to go around.
Mr Queiroz was recently brought to Australia by Rabobank, to provide Australian beef producers with
a first hand knowledge of trends in the Brazilian beef industry.
During his seven day visit Mr Queiroz was the guest speaker at presentations in several states with a
number of leading beef producers present.
Mark Bennett, Rabobank State Manager for Victoria and Tasmania, said they were pleased to be able
to bring visiting experts like Mr Queirzo to Australia.
“One of the best ways to manage change is through knowledge. Through Fernando’s presentations,
we have been able to explore how Brazil operates first hand, which has been extremely valuable to us
and to the beef producers that attended our forums,” Mr Bennett said.
Mr Queiroz’s message to Australian producers was clear - the days of cheap food are over and the
world will depend on countries like Brazil and Australia to meet that demand.
“I believe the world can pay higher prices for things like beef, chicken, and pork, it is already
happening,” he said.
“There will be a lot more volatility, but suppliers of food will have much more power then we had
before.”
Brazil currently produces 18 per cent of the worlds’ beef, consuming domestically nearly 80 per cent
of its current production Mr Queiroz said in Brazil beef is the preferred source of protein over chicken
and pork, which are both cheaper.
He said increased domestic consumption has been driven by higher economic growth and this
scenario is happening world wide. “Consumption is booming in lower social classes globally and that
is the consumer Brazil is targeting,” he said.
Brazil boasts the largest and fastest growing commercial herd in the world and is expanding beef
exports in both the fresh and frozen market. “Since 2003 the Brazilian herd has grown by nearly 15
million head,” he said.
“On top of this we have 394 million ha available and we are currently only using 68 million ha. There
is a lot of potential. There is a big shift to the north and wherever the cattle go the industry follows.”
Media Release
April 8, 2008
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Brazil’s increase in production has also been matched by improvements in genetics and the fact they
do not rely on just one product.
Mr Queiroz said most farms grow two to three crops - a combination of soybeans and cattle or cattle,
corn and sugar cane giving the farmer much more flexibility.
“The majority of our cattle are on grass feed so we are not impacted directly by grain prices. If grain
prices are going up that is good for Brazil as it widens the gap between our grass fed and other
countries grainfed beef,” Mr Queiroz said.
“We also have minimal labour costs with the average farm worker only averaging about $200 to $250
USDA per month. In addition we have a very good climate with an average rainfall of 1500
millimetres per year which means we can run an average of 1 head per ha up to 11 head per ha.”
Brazil is also becoming a significant player in live cattle trade. While a relatively new industry Mr
Queiroz admits they are benchmarking themselves on Australia’s live cattle industry.
“We can still use older vessels, but that is under discussion, we are raising our standards in live
exports, but our main challenge remains the transport of the animals.”
About 80 per cent of the Brazilian herd are Bos Indicus Brahman and Nelore which are a Zebu Bos
indicus cross. They also have been crossing Nelore with Angus and Blonde Aquitaine breeds.
“Nelore adapt better to north Brazil which is closer to the equator, where in the south they tend to use
more cross breeds,” he said, adding that farms are also retaining cows now to build herds.
Brazils key export markets are the European Union, Russia, Egypt and the Middle East.
It does not have access to most of Australia’s traditional markets like Japan, Korea, Mexico, Canada
or USA despite the fact that it supplies one third of the world beef exports.
And to have any chance of ever accessing these markets Mr Queiroz said Brazil must improve its
sanitary status.
“A big problem for us is that we are part of a big continent and there have been outbreaks of Foot and
Mouth Disease (FMD) on our borders,” he said.
“We can’t control our neighbours so Brazil has decided to help eradicate FMD by donating vaccine to
neighbouring countries. This will be better for us. It will be difficult or us to access other markets
unless we eradicate this disease from the whole continent,” he said.
Going forward Mr Queiroz believes Australia and Brazil can share their experience.
“The time of cheap food is gone forever and we are in the business of the future the world needs us
and we are ready.”
Rabobank Australia is a part of the international Rabobank Group, the world’s leading
specialist in food and agribusiness banking. Rabobank has more than 100 years’ experience
providing customised banking and finance solutions to businesses involved in all aspects of
food and agribusiness. Rabobank has a AAA credit rating and is ranked as one of the world’s
safest bank by Global Finance magazine. Rabobank operates in 42 countries, servicing the
Media Release
April 8, 2008
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needs of more than nine million clients worldwide through a network of more than 1500 offices
and branches. Rabobank Australia is one of Australia’s leading rural lenders and a significant
provider of business and corporate banking and financial services to the Australian food and
agribusiness sector. The bank has 49 locations throughout Australia.
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Media contacts:
Denise Shaw
Jen Reid
Public Relations
Public Relations
Rabobank Australia & New Zealand
Rabobank Australia & New Zealand
Phone: (02) 8115-2744
Phone: (02) 8115-4861
Email: denise.shaw@rabobank.com
Email: jen.reid@rabobank.com
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