Uruguay's Livestock Market Seeks Equilibrium Amidst Price Disputes and Low Supply

The Uruguayan livestock market is navigating a period of price negotiation and limited transactions. Producers are holding out for better prices, while the industry is offering rates that haven't been fully accepted, leading to a sluggish market. This standoff is particularly evident in the supply of pasture-fed cattle, with some processing plants struggling to secure enough raw material, operating on short-term contracts or limited inventory.

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The market seems to be trying to form itself, there is a post-Easter situation where, in addition to very little pasture-fed cattle supply, better prices than those offered by the industry are sought, which are around US$ 5.20 for steers and US$ 4.90 to US$ 5.00 for cows.

The post-Easter period has seen a quiet market, with few deals finalized. While there's an expectation that producers might eventually accept some frigorifico offers as a floor price, or that more supply might become available, the current situation is characterized by a market in "dispute or formation." This uncertainty is influenced by factors such as delayed green pastures in some regions, although others are experiencing favorable conditions.

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There are plants that, if they don't have access to corral agreements or other cattle, are very short on raw material, which is why they have 2, 3 or 4 days of intake.

Furthermore, a shift in production practices, with more producers opting for rearing instead of immediately selling steers and heifers, is contributing to the reduced supply of finished cattle. Despite these challenges, current market prices are considered good by some, and recent rains and favorable temperatures are improving forage conditions, potentially normalizing the situation in the coming weeks. The market's direction will be closely watched in the immediate future.

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We have to see if producers finally validate some of the frigorificos' proposals as a floor price or if something more becomes available, which would allow industries to work more comfortably and market prices would be defined.