Factors Defining Prices of Finished Cattle in Mato Grosso Contrasted Within Brazil’s Pricing Structure

Abstract

Due to the socioeconomic importance of beef cattle production in Brazil, there are several studies that have been dedicated to the analysis of cattle price formation. The research herein introduces advances in the formulation of these prices by including logistics and industry concentration variables. We aimed to analyze the “prices paid” behavior for male cattle destined for slaughter in the state of Mato Grosso versus other Brazilian states and to evaluate the main factors that influence prices to producers. To this end, several Brazilian databases on price registration were analyzed using regression models. From the mid-1990s onwards, the price paid for cattle presented a scenario of more stable and less variable prices. In all Brazilian states, there was an alignment of prices with the Cepea Indicator, except in the Northeastern states. In Mato Grosso, the Cepea Indicator alone represented more than 90% of the cattle pricing phenomenon. Other factors that contributed to the formation of the price of live cattle in the state were: the distance from São Paulo state, the period of the year, the number of available cattle in the influence region, and slaughterhouse concentration. In the state of Mato Grosso, the Cepea Indicator showed greater discounts when compared to other Brazilian states; therefore, the use of indicators to assess the price paid for live cattle helps to reduce the asymmetry of information between farmers and industry.