Lower confinement feed costs for cattle

The cost of feeding beef cattle in feedlots fell in January. Expectations for a record harvest in 2024/25, the start of the grain harvest, and lower international references for feed grains eased finishing costs. Such a downward trend had not been observed since mid-August or September of last year, depending on the region, according to the Food Cost Index (Icap) published by Globo Rural.

In the Midwest, the average cost of feeding feedlot cattle was R$14.24 per head per day in January, a 1.52% drop compared to January 2024 and a 6.75% decrease compared to December. “The drop in Icap is tied to the record grain harvest in Brazil in 2024, especially corn, which increased the supply of inputs and reduced feed costs in confinement,” the company said.

In the Southeast, the index reached R$12.77 per head per day, a 4.06% monthly drop, the first since August. Compared to January 2024, there was a 5.71% increase, driven by the recovery of the finishing market following a rise in the price of fattened cattle during the period. “Although Icap will show a drop at the beginning of 2025, the market remains dynamic, and the effective impact of these factors (over the year) will depend on the progress of the harvests, demand trends, and commodity volatility in the coming months,” the company stated.

The combination of lower feed costs and an increase in the price of fat cattle has benefited confinement margins, after two years of major challenges. “However, feedlot operators must pay attention to management indicators, as costs tend to fluctuate significantly during the off-season,” it warns.