Echoing the recent surge in coffee prices, cattle prices in
Brazil have gained, as high temperatures and
unseasonably low rain fall has impacted grazing pastures, "bringing
difficulties" in fattening animals.
The lack of rains and very high temperatures in most part of
Brazil since the end of the last year affect the development of pastures,
bringing difficulties for the fattening of animals that would be slaughtered in
this early 2014", research institute Cepea said.
Brazil, where most cattle are grass-fed, recorded the
hottest January on record last month.
São Paulo witnessed a 3 degree increase in average temperatures on the
prior January, according to the National Institute of Meteorology of Brazil.
"South-eastern and central-western states have
water deficit," added Cepea. The
key agricultural-producing southeast and west areas witnessed the lowest
rainfall in two decades, according to meteorologists.
"Water reserves in the soil oscillate from 20% to 40%,
below the range considered adequate for the vegetation growth," said
Coffee has soared in recent weeks and the effects of the
hot-dry conditions have started to bolster livestock prices, which normally
ease after the Christmas demand rush.
The Fed Cattle Price Index for the São Paulo State recorded
on a slight increase of 0.3% in January to end the month at $47.59.
The index has since edged higher, posted its highest close
since the end of December at $48.71.
The index ranged between $41.41-50.80 in 2013.
Feed cattle futures in Chicago are currently up 0.2% on the
day. March futures are down 2% from
their January 22 peak of 170.80 cents a pound amid falling wholesale beef
are seen returning
"The weather pattern is in a groove in South America
with drought continuing over most of Brazil," report Martell Crop
Projections, as a "stable ridge of high pressure has dominated the Brazil
tropics creating widespread drought."
In addition Martell said that "nagging heat would
continue in south Brazil, though less hot than previously".
However Brazil's weather forecaster Somar suggests the
pressure for ranchers may ease with rains seen returning to Brazil's
centre-south farming region next week.
"The lack of rains is especially critical," warned
"The lack of
rains is especially critical in São Paulo, Goiás and South Minas Gerais, where
most pastures are still at bad condition."