In August, slaughter volumes in the Mercosur region retreated from July's peak, marking the first year-on-year decline of 2025. The overall expansion cycle appears to have reached its peak, yet country-level dynamics are diverging.
Brazil – As the regional core, Brazil's slaughter hit a record high in Q2. However, the destocking phase is drawing to a close, with producers gradually shifting toward herd rebuilding. A decline in cow slaughter is expected, which may tighten overall production and exportable supply. The rise in calf prices is emerging as a potential inflection signal.
Argentina and Uruguay – A different picture is unfolding. Driven by high cattle prices, slaughter of young heifers has recently increased, with producers opting for early liquidation. While this has temporarily boosted supply and delayed production contraction, it has weakened the breeding herd base, raising the risk of production pressure ahead.
Paraguay – With limited scale, Paraguay mainly serves as a supplementary supplier, exerting relatively minor influence on the regional trend.
Overall, South America's beef industry is shifting from expansion to contraction. Brazil is leading the downturn, while Argentina and Uruguay are temporarily lifted by price-driven slaughter. This divergence highlights growing internal contrasts within the region. As herd rebuilding progresses, a more pronounced production decline is expected in the coming six months, continuing to support elevated global beef prices.
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