Brazilian beef production is expected to decline in 2026 after three years of substantial female cattle slaughter, which led to historic drops in cow herds and calf production.

As Brazil steps into 2026, the agri-business sector is poised for growth, although the outlook for exports and domestic consumption is subject to persistent trade tensions and election-year volatility.

On the upside, low feed costs are poised to support growth in the animal protein sector, according to a detailed new report from RaboResearch.

Meanwhile, tighter margins, high interest rates and debt taken on in previous years continue to constrain cashflows for grain farmers, but soybean area will still rise by 2%.

Higher beef prices expected in 2026 may boost competitiveness of cheaper meats, interrupting the recovery trend in beef consumption that began in 2023.

The application of a 55% tariff by China on imports of Brazilian beef over a 1.1 million metric tonne quota in 2026 is likely to reduce Brazil's competitiveness in Q4 2026.

With Brazilian beef production is expected to decline RaboResearch forecasts a 5% to 6% reduction in beef supply compared to 2025 totalling 10 point 5 million tonnes (carcass equivalent).

This decrease is due to fewer available animals and a focus on herd rebuilding with calf prices showing consistent recovery.

The reduced supply should support higher finished cattle prices, at least until 2028 directly affecting slaughter-ready cattle availability.

Despite lower production, demand - especially from international markets - remains strong. Feedlot occupancy rose 18.5% in October 2025 versus the previous year, aided by lower feed and replacement costs, which have supported short-term supply.

Domestically finished cattle prices have been rising since mid-2025 with futures for February 2026, exceeding BRL 330 (approximately €52.60) per aroba (15kg), signalling an increase of up to 10% over spot prices.

However, higher prices may face resistance at the retail level, where cheaper meats like chicken and pork could gain market share.

Beef exports from Brazil

According to the report, exports remain robust. By November 2025, Brazil had exported a record three million metric tons of beef, up 16% in volume and 35% in value year-on-year.

China remains the top destination (47%) followed by the US (9%). The rollback in US import tariffs returning to 26.4% is expected to drive additional demand in early 2026.

China's recent application of a 1.1 million metric tonne quota for Brazilian beef imports in 2026 with a 55% tariff applied to any imports above this volume, is expected to directly impact Brazilian competitiveness in Q4 2026 potentially limiting the typical upward trend in prices during that period.

Completion of trade agreements with Japan and South Korea in 2026 is projected to substantially boost demand for high-value beef.

Domestic beef consumption is expected to fall by 8% or 9% in 2026 to around 30kg per capita due to higher prices and limited supply.

Overall, 2026 will be a year of adjustments for Brazilian livestock farming, requiring advanced risk management, market diversification and investments in quality to maintain global competitiveness.

Poultry

Global chicken meat supply is expected to continue to grow in 2026 with major producers such as the US, China, the EU and Brazil all projecting increases.

However highly pathogenic avian influenza (bird flu) remains a significant risk. Development of effective commercial vaccines is advancing globally, but most importing countries are cautious about allowing vaccinated poultry into their markets.

Brazil continues to avoid vaccination, focusing on strict prevention measures to protect its export markets.

Around 65% of Brazil's chicken production is consumed domestically with per capita availability reaching 49kg.

Major events such as the FIFA World Cup and the presidential elections are expected to boost meat consumption in Brazil from July to November.

Trade tensions

Trade tensions remain a critical concern according to Andy Duff, head of RaboResearch Food & Agribusiness – South America.

“China's new quota of 1.1 million metric tons for Brazilian beef, with steep tariffs on anything above that, will definitely impact flows later in the year," Duff explained.

"On the flip side, ongoing US pressure on its trade partners could make Brazil a more attractive origin for commodities like soybeans and cotton, and even open doors for animal protein."

Also Chinese delays in US pork plant approvals and provisional anti-dumping tariffs on EU pork are opening doors for Brazilian pork.

At the same time Mexico’s shift from US chicken – up 70% in Brazilian imports – shows how trade friction favours Brazil.

“Still, Brazil will need to defend its position in Asia as US competitiveness rebounds,” Duff warned.

Election year volatility

“The election year adds another layer of uncertainty,” Duff continued. “Our macroeconomics specialists expect pressure for higher social spending, wage increases, and public investment, which could limit structural fiscal reforms and put Brazil’s rising debt-to-GDP ratio back in the spotlight.

"On top of that, more corn ethanol production will put more high-protein animal feed ingredients into the market, which can lower feed costs for animal protein producers.

"Also higher biodiesel blending will drive soybean crushing. All of this helps keep Brazil’s meat exports highly competitive, and we expect strong international demand to continue," the RaboResearch representative explained.

According to the report, the combination of a return to average margins for grains and oilseed farming and high local interest rates created financial stress for leveraged producers in 2025.

Although the interest rate cycle is expected to see a modest downturn, relief is likely to be limited for such players during 2026. And this also reportedly have a knock-on effect for some farm inputs players.

Growth

The area planted to soybeans is projected to expand by 2% in 2025/2026. The value of national fertiliser and seed sales in Brazil is also expected to grow.

However, there are signs that margin pressure may emerge in other sectors in 2026.

“Favourable prices in recent years enabled cane industry players to boost their financial robustness, but their resilience may be tested in the coming 12 months," Duff continued.

"A large Center-South cane crop could be negative for both sugar and ethanol prices in 2026 and create a dilemma for millers regarding cane allocation between sugar and ethanol production.

“Brazil's corn ethanol industry, on the other hand, appears unfazed by the outlook and is expected to register further growth in capacity and output in 2026.”

Duff emphasised that producers are operating in a complex financial environment “but despite all challenges, Brazil’s agri-business remains resilient, with growth continuing at the aggregate level".