Executive Summary

Post revised broiler production and trade in 2009 to reflect new estimates made by trade sources. Broiler production is likely to increase by only three per cent in 2009, as compared to a seven per cent increase in 2008. Although industry leaders forecast a five per cent increase in broiler exports in 2009, post revised exports to increase by only two per cent in 2009. Export growth is forecast significantly below 2008's double-digit increase. GAIN says its new estimates reflect the concerns of broiler packers with the current over supply of poultry meat and reduced international demand for Brazilian broilers.

The outlook for the Brazilian economy in 2009 is mixed with most market analysts forecasting an economic growth at one to two per cent, while the government maintains its optimistic view of an increase in GDP of four per cent. Domestic demand for animal protein is expected to increase, but at a slower pace than in previous years, as the unemployment rate is expected to increase.

Post also revised turkey production and exports to reflect above changes and final production and export data for 2008.

Commodity Outlook, Broilers

Production

Post revised downward broiler production in 2009 to 11.3 million metric tons, nearly three per cent higher than last year's record production of 11 million metric tons. Broiler growers are responding to industry leaders' exhortations to cut back production by 20 per cent during the first quarter of 2009 in order to adjust supply and demand.

The latest industry data indicates that broiler growers placed 15.5 per cent fewer chicks for meat production in January, 4.5 per cent less than the 20 per cent target.

Market analysts indicate that the current low price of corn in Brazil kept growers from making further cuts in production.

Consumption

Post revised downwards broiler consumption in 2009 to reflect slower growth in the Brazilian economy combined with a higher rate of unemployment. However, the current retail price of broilers in the local market is competitive with pork and beef and will offset somewhat competition from these other animal proteins.

Trade

Post also revised downward broiler exports for 2009 in order to reflect the impact of the credit crunch on broiler demand from most traditional markets for Brazilian broilers, such as Japan, Saudi Arabia, Russia and Hong Kong.

Industry leaders, however, remain optimistic and forecast a five per cent increase in broiler exports this year and believe that world market demand will improve in the second half of 2009.

Despite the progress made by Brazilian officials to open new markets in China and India, it remains uncertain if Brazilian exporters will actually begin exporting to these markets in 2009. Therefore, exports to these new markets have not been included in our PSD table.

Post also updated trade data for 2008 to include final official export numbers. In 2008, total Brazilian broiler exports set another record in both volume and value. Total volume exported increased by 11 per cent from 2007 to 3.6 million metric tons, including further processed and salted broilers. Total export value increased by 40 per cent from 2007 to nearly US$ 7 billion in 2008, reflecting a 26 per cent increase in the average export price.

Broiler export markets with major increases in 2008 were Venezuela (+98 per cent), Japan (+27 per cent), and Hong Kong (+16 per cent), while markets with major declines were European Union (-27 per cent), followed by South Africa (-24 per cent) and Russia (-18 per cent).

Commodity Outlook, Turkey

Post made some slight changes in turkey production and exports to reflect new numbers obtained from trade sources. Post also update 2008 data to reflect final numbers for production and trade.

Further Reading

-

You can view the full report by clicking here.

Other Reports in this Series

To view our complete list of 2009 Poultry and Products Reports from USDA FAS GAIN, please click here

February 2009