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Biological assets

12 Months Ended

Dec. 31, 2023

Notes and other explanatory information [abstract]

8.	Biological assets

The live animals are represented by poultry and pork and segregated into consumables and animals for production. The rollforward of the biological assets are presented below:

Schedule of biological assets
	Current		Non-current
	Live animals
	Total		Live animals		Forests		Total
	12.31.23	12.31.22	12.31.23	12.31.22	12.31.23	12.31.22	12.31.23	12.31.22
Beginning balance	3,151,551	2,899,921	1,301,971	1,093,545	347,162	320,937	1,649,133	1,414,482
Additions/Transfer	27,098,935	28,453,575	710,121	677,234	72,576	60,489	782,697	737,723
Changes in fair value (1)	2,959,703	3,920,825	(380,608)	(221,705)	187,736	33,840	(192,872)	(187,865)
Harvest	-	-	-	-	(48,410)	(67,546)	(48,410)	(67,546)
Write-off	-	-	-	-	(15,966)	(558)	(15,966)	(558)
Transfer between current and non-current	284,002	267,021	(284,002)	(267,021)	-	-	(284,002)	(267,021)
Transfer to inventories	(30,727,668)	(32,344,487)	-	-	-	-	-	-
Exchange variation	(71,052)	(49,156)	(37,316)	(21,437)	-	-	(37,316)	(21,437)
Monetary correction by Hyperinflation	6,693	3,852	5,052	41,355	-	-	5,052	41,355
Ending balance	2,702,164	3,151,551	1,315,218	1,301,971	543,098	347,162	1,858,316	1,649,133

(1)

The change in the fair value of biological assets includes depreciation of breeders and depletion of forests in the amount of R$1,390,550 (R$1,214,002 in the same period of the previous year).

The estimated quantities of live animals on December 31, 2023 are 198,729 thousand heads of poultry and 4,866 thousand heads of pork (213,491 thousand heads of poultry and 4,885 thousand heads of pork on December 31, 2022).

The Company has forests pledged as collateral for financing and tax and civil contingencies on December 31, 2023 in the amount of R$71,399 (R$59,388 on December 31, 2022).

8.1.

Sensitivity analysis

The fair value of animals and forests is determined using unobservable inputs, therefore, it is classified in the Level 3 of the fair value hierarchy. The main assumptions used in the measurement of the fair value and their impact on measurement are presented below:

			The estimated fair value can change if:
Asset	Valuation methodology	Non observable significant inputs	Increase	Decrease
Forests	Income approach	Estimated price of standing wood	Increase in the price of wood	Decrease in the price of wood
		Productivity per hectare estimated	Increase in yield per hectare	Decrease in yield per hectare
		Harvest and transport cost	Decrease of harvest cost	Increase of harvest cost
		Discount rate	Descrease in discount rate	Increase in discount rate
Live animals	Cost approach	Price of the feed inputs	Increase in feed cost	Decrease in feed cost
		Storage costs	Increase in storage cost	Decrease in storage cost
		Outgrowers cost	Increase in outgrowers cost	Decrease in outgrowers cost

The prices used in the valuation are those practiced in the regions where the Company is located and were obtained through market research. The discount rate corresponds to the average cost of capital and other economic assumptions for a market participant.

The weighted average price used in the valuation of biological assets (forests) on December 31, 2023 was equivalent to R$76.22 per stere (R$54.12 per stere on December 31, 2022). The real discount rate used in the valuation of the biological asset (forests) on December 31, 2023 was 8.1% p.a. (7.89% p.a. on December 31, 2022).