Growth of Brazilian Beef Production: Effect of shocks of supply and demand

Abstract

With the considerable growth of beef production in Brazil and the growth in beef exports as a backdrop, the main objective of this study is to identify the factors responsible for the excellent performance of this agribusiness sector. Conducting this study required the construction of a theoretical model that was capable of supporting the specification of the adjusted econometric model using vector autoregression with identification by the Bernanke process. The findings show that the main determinant of beef cattle growth and Brazilian beef exports is increased animal stock. Furthermore, productivity has a positive, albeit more modest, effect on beef production and exports. The results show that the increase of the number of cattle reduces costs to the farmer and retail beef prices.