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After returning about 20 ships with soybeans, China is causing concern among Brazilian meatpacking plants, which have started to review production schedules, suspend some slaughters, and organize collective vacations due to the advancement of the annual quota set by China for the purchase of Brazilian beef in 2026.
Set at 1.106 million tons, the Brazilian limit maintains the regular tariff up to this volume and provides for an additional charge of 55% on the excess, a rule that reduces the competitiveness of shipments that exceed the quota. The measure does not constitute a general embargo on Brazilian beef.
In effect since January 1, 2026, the mechanism affects suppliers such as Brazil, the United States, and other beef-exporting countries. According to Reuters, the extra tariff is valid for three years and is applied when volumes exceed the limits set by Beijing.
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China adopted the system after an investigation into the increase in beef imports and its effects on local livestock. In the Brazilian case, the new rule created uncertainty about production in the second half of the year, especially in industrial plants dependent on Chinese demand.
Chinese quota pressures beef exports
With the approach of the shipping cap with a lower tariff, companies from different states have started to reorganize operations, reduce schedules, and consider collective vacations in units more exposed to the Chinese market.
Among the affected companies, Frigol, Better Beef, Iguatemi Beef, and Plena Alimentos have scheduled partial shutdowns, reduced slaughters, or collective vacations in plants where production has a strong share of sales to China.
Part of the pressure occurs because Beijing counts the meat when it arrives at Chinese ports, not just when the product leaves Brazil. This rule has increased concern about shipments made at the end of 2025 and received in 2026.
The doubt about products in transit arose at the beginning of the year when Brazil was still seeking clarity on the treatment given to shipments already on their way to China before the new rules took effect.
By May, Brazil had filled 65.4% of the quota, according to Chinese data cited by companies in the sector. The expectation among executives is that Chinese buyers will reduce or halt business until October, when new shipments would tend to arrive within the 2027 quota.
Frigol reduces slaughters and gives collective vacations in Pará
At Frigol, the Água Azul do Norte unit in Pará will have collective vacations of 18 days starting July 1 for almost a thousand employees, due to the lower predictability of sales destined for the Chinese market.
According to CEO Luciano Pascon, the plant allocated 70% of production to China, which makes the operation more vulnerable to the temporary drop in demand. In other units, the company plans to reduce slaughtering by about 20%.
Even after the return of employees, Pascon stated that the operation may continue to be between 30% and 40% smaller. The difficulty, according to the executive, lies in quickly redirecting all the meat that was previously absorbed by Chinese buyers to other markets.
Better Beef reorganizes production in São Paulo
In the interior of São Paulo, Better Beef decided to halt production at the Araçatuba unit between July 20 and August 10, while reorganizing distribution between the domestic market and international destinations.
To compensate for the shutdown, the company plans to concentrate operations at the Rancharia plant, which usually sends 80% to 85% of its production to China, and redirect volumes to other countries and domestic consumption.
Commercial manager Sandro Batista reported that the company was aiming for growth of about 10% in 2026, after earning approximately R$ 3 billion in 2025. With the Chinese restriction, the outlook has shifted to repeating the previous year’s performance.
Iguatemi Beef and Plena Alimentos make adjustments
In Mato Grosso do Sul, Iguatemi Beef scheduled collective vacations in July for about 650 of the 850 employees at the factory located in the municipality of Iguatemi, one of the operations most dependent on exports.
Of the unit’s production, between 90% and 95% is exported, with approximately 80% destined for China. This concentration increases the impact of any temporary reduction in Chinese purchases on the pace of slaughtering.
Export director Douglas Domingues stated that reducing slaughtering helps control costs during a period of lower demand and high cattle prices. The company also reinforced stocks to seek sales to the United States, the Middle East, the United Kingdom, and the domestic market.
Also affected by the quota, Plena Alimentos will adopt collective vacations of 21 working days for 1,500 employees at plants in Goiás and Tocantins. Meanwhile, Astra Foods, from Cruzeiro do Oeste, in Paraná, intends to sell part of the meat that will no longer be sent to China regionally.
Large meatpackers attempt to reduce impact
In large groups, the diversification of destinations, proteins, and international operations tends to reduce the immediate impact of the quota. Brazilian units can increase sales to markets such as the United States, while plants in neighboring countries remain able to supply China from other origins.
Through Friboi, JBS had already informed that it would halt the production of specific cuts for China starting June 20. When questioned about collective vacations in Brazilian units, JBS, MBRF, and Minerva did not comment on the matter.
The situation exposes the dependency of part of the Brazilian beef industry on the Chinese market. As the main external buyer of the Brazilian product, China influences industrial scales, cash flow, logistics, and negotiations with cattle ranchers whenever it changes its entry rules.
Although the additional tariff does not prevent exports, the higher cost can make contracts unfeasible or reduce margins. Therefore, slaughterhouses try to avoid shipments that reach China above the annual limit established for Brazil.
For companies with plants highly focused on China, the solution involves extending inventories, renegotiating destinations, and adjusting slaughters to the purchasing pace of other markets. This substitution, however, does not occur immediately, because each country requires specific cuts, sanitary standards, certifications, and contracts.
With the quota near the limit and slaughterhouses reducing operations, the sector enters the second semester trying to gauge how much of the production previously sent to China can be absorbed by other buyers without causing new shutdowns.
How far will Brazilian slaughterhouses be able to replace the weight of Chinese demand without increasing cuts in production?
