Latam Food & Agri Buzz: Drought and structural headwinds push out beef cycle recovery

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Latam Food & Agri Buzz: Drought and structural headwinds push out beef cycle recovery

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Latam Food & Agri Buzz

Drought and structural headwinds push out

beef cycle recovery

Industry Overview

Drought weighting on herd rebuild confidence 02 July 2026

In our last Agri Buzz edition, we discussed drought conditions for grain crops in the US. Equity

We are now drawing attention to cattle conditions and how this is impacting herd Americas

rebuild. In the last six years, drought conditions in the main cattle raising regions have Food-Commodities

not been very adequate for hay and graze growing, raising uncertainty for investments in Isabella Simonato >>

herd expansion. According to a survey conducted by Terrain Ag, a research company Research Analyst

focused on agribusiness space, grazing conditions and pasture availability are the main Merrill+55 11Lynch2188 (Brazil)4243

reasons why surveyed ranchers are not expanding their herd. During an event we hosted isabella.simonato@bofa.com

this week, Derrell Peel also mentioned drought as an important factor to bring Peter T. Galbo, CFA

Research Analyst

confidence for farmers to start retaining heifers again. BofAS

peter.galbo@bofa.com

USDA points to challenging pasture and hay conditions Julia Zaniolo >>

The USDA drought monitor points to more than half of the cattle herd is in areas Merrill Lynch (Brazil)

experiencing drought. This is +20p.p. above the last five years average for June. Hay +55 11 2188 4367

julia.zaniolo@bofa.com

production is in a similar situation, with 50% of the acreage experiencing drought

Chris Downing

(+25p.p. vs historical average). In the end of June, 35% of the pastureland was under Research Analyst

poor and very poor conditions (42% in May) and more 31% were in fair conditions.