Cost of goods sold increased by 12.0%, practically in line with revenue growth, from R$ 16,442.7
million in the year ended December 31, 2013 to R$18,408.2 million in the year ended December 31,
2014. The increase was mainly due to (i) the 9.1% increase in expenses related to raw materials
(finished cattle and live cattle), with the fed cattle price increasing by almost 25%, according to the
ESALQ index (which measures cattle price variations in the state of São Paulo); (ii) the 8.3% increase
in labor costs; and (iii) the 9.7% increase in production costs, such as electricity, packaging and other
indirect costs.