Brazil seeks new beef markets as China quota fills, EU ban looms

Brazil's protein industry is seeking to diversify its export routes, given that China's beef quota is largely filled and the EU's import ban is set to take effect in September.

A redirection of trade flows is already underway as Brazil increases beef shipments to the US and Russia, S&P Global Energy CERA analyst Caroline Machado told Platts at the Agriculture and Livestock International Forum in Campo Grande, Mato Grosso do Sul, June 18.

"The US still has room to absorb additional volume, while Russia could gain further relevance after recognizing Brazil as free of foot-and-mouth disease," Machado said.

Furthermore, given a transit time of roughly 45 days, Machado said shipments to China could resume around mid-November, with cargo arriving in January and counting against the following year's quota.

Starting Sept. 3, Brazil will be removed from the EU's list of countries cleared to export animal products, under a measure on growth-promoter antimicrobials that the bloc formalized in early June. Within Mercosur, it singles out Brazil.

Damian Lluna, representative of the EU delegation, told the conference that the rule is not new, tracing it to 2019 legislation that has bound European producers since 2022 and is only now being extended to imports. Lluna said his colleagues in Brussels are "working intensely" with Brazil's agriculture ministry, and a call had just taken place between the Brazilian and European leaderships, where a "new mechanism" had come out of it, though he offered no further details.

DDG drives efficiency in protein chain

Panelists said dried distillers' grains, a coproduct of corn-ethanol production, are also reshaping the protein market.

"With more DDG availability in the coming years, we will be able to produce more volume without requiring additional land," said Eduardo Pedroso, Friboi's director of cattle origination. "Younger animals mean faster turnover, with weight being the key driver of profitability," while noting this is all due to DDG's high protein content.

The corn-ethanol industry is mainly centered in Mato Grosso, home to the largest cattle herd in Brazil. Data from the National Union of Corn Ethanol shows there are 14 plants in Mato Grosso, representing 48% of the country's total, with six more expected to be built in the coming years.

The event also highlighted corn-ethanol's low carbon intensity.

"We see corn ethanol as a marine fuel closer to reality today than sustainable aviation fuel," Andréa Veríssimo, UNEM's international relations director, told Platts at the event. "Since you can't swap a vessel's engine, the solution has to be drop-in, and corn ethanol is well on its way there."

Aviation, by contrast, remains a longer game; the sector is still working out how to bridge the gap between SAF and fossil fuel, Veríssimo said.

Part of that future involves technical corn oil, an ethanol coproduct being repositioned from animal feed to SAF.

"We're looking at TCO in a way we didn't before," Veríssimo said, as the product's low-carbon intensity makes it eligible for SAF production.

What sets the Brazilian product apart, Veríssimo said, is that it is an intermediate crop rather than a primary one, and, unlike sugarcane, it can be stored, so there is no seasonal break in supply.