Brazil’s Beef Contraction Expected to Fuel Record Growth for Poultry, Pork Producers

Brazil’s beef production is forecast to contract by 3.5% in 2026, forcing a shift in domestic protein consumption that is set to drive record output for the country’s poultry and pork sectors. The National Supply Company (CONAB) projects the decline in beef output to 10.6 million tonnes, a direct consequence of producers entering a herd rebuilding phase after years of high female slaughter rates. This tightening supply will raise domestic beef prices, creating a clear opportunity for diversified meatpackers like JBS (JBS) and the recently merged Marfrig/BRF (MBRF), which have significant exposure to the growing alternative protein market.

The central mechanism driving this sectoral rotation is the cattle cycle reversion. The Brazilian Beef Exporters Association (Abiec) forecasts total cattle slaughtered will fall from an estimated 42 million head in 2025 to 40 million head in 2026, according to recent statements. This retention of cattle for breeding purposes reduces the immediate availability of animals for processing. The current cost of cattle, reflected in the Boi Gordo (fat cattle) price at R$348.3 per arroba, highlights the input pressure on beef processors. With domestic beef consumption already expected to fall by up to 9% due to the higher prices, the market is quickly substituting beef for cheaper alternatives.

The resulting price differential is poised to deliver banner years for the poultry and swine sectors. Chicken production is projected to grow 2.8% and pork production 3.6% in 2026, setting a new record for the swine sector, according to market projections. The Brazilian Animal Protein Association (ABPA) forecasts are even more bullish, with chicken production growing up to 5.6% and pork up to 5% as domestic supply increases alongside strong export demand. This favorable backdrop directly benefits the multi-protein platforms of major Brazilian players.

For investors, the supply dynamic provides a clear operational tailwind for those focused on poultry and pork. JBS, the world's largest meatpacker, is well-diversified globally, with its Brazilian Seara poultry and pork division and its U.S. Pilgrim's Pride unit consistently delivering strong results that help offset volatility in its beef segments. Similarly, the merger between Marfrig (MRFG) and BRF (BRFS) has created the combined entity MBRF, a global platform with a strategic focus on processed, poultry, and pork products. Analyst commentary on Marfrig has noted that while its South American beef operations face pressure from higher cattle costs, the favorable poultry and pork cycles for its BRF subsidiary support a resilient outlook for the combined entity’s earnings.

What to watch next is the pace of the herd rebuilding and its impact on the Bezerro (calf) price, which currently trades at R$3,163.96 per head in São Paulo. A sustained rise in calf prices signals that producers are committed to retention, which will further restrict slaughter availability over the next 18 to 24 months, solidifying the domestic cost pressure on beef and, by extension, the opportunity for chicken and pork producers through the remainder of 2026.