dairy cow
March 27, 2017

Brazilian Meat Scandal Boosts Dairy Profits

 |  By: Know Your Market

Much attention has recently been given to the Brazilian meat scandal that has been developing. For the past three years Brazilian police have been investigation meat packing facilities throughout the country after a government health inspector tipped of police to potential violations.

The whistle blower, who confronted the initial meat plant about excess marrow, bone and other byproducts and food meant for human consumption, was quickly removed from his duties but eventual exposed the world’s largest beef and poultry exporter.

Police found that 21 meat packing plants in Brazil were in violation and 33 health inspectors and industry employees have been arrested thus far.

As a result, Brazilian exports have plummeted. In 2016 Brazil exported $5.5 billion worth of beef. China and Chile are just a couple of countries that have banned Brazilian meat following the scandal.

What does this mean for dairymen? Fat cattle prices have grown $7 per CWT the last couple of weeks and offers a better cull cow market moving forward. With milk prices continuing to fall the situation offers a better outlet to shift some animals at a time where milk production remains strong and cow numbers are growing.