MLA reports that the Brazilian feedlot industry is characterised by a relatively short feeding regime, typically less than 100 days, utilising sub-products from the cropping industry (such as sugar cane and corn silage) in addition to some grains such as cotton seed.

Production is largely oriented to increase supplies during spring, when supplies tighten and prices rise.

Feedlot turnoff (marketing) dropped nine per cent in 2010, to 1.2 million head, mainly as a result of rising input prices (light steers and feed costs) early in the year and price uncertainty between September and November.

Despite input prices continuing to be high in 2011, and cattle prices expected to increase (but remain below 2010's records), Brazilian feedlot operators are more optimistic about margins in 2011. Additionally, feedlot operators are reportedly utilising risk management tools, such as option and futures contracts.

MLA states that Agripoint's research also shows that companies such as JBS and Brasil Foods are increasing their participation in this segment, largely to ensure production during the lower supply periods of the year.