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Weekly Overview: Dancing to a Latin Beat

07 March 2013

ANALYSIS - The recent outbreak of bird flu in Mexico is thought to be behind the rising prices of chicken and eggs in the country, which is being blamed on speculation. The authorities say the outbreak is being brought under control. In Peru, it is the poultry industry that drives maize and soybean markets while in Brazil, there has been a strong focus on further development of export markets. The German and US governments seem to be tightening up on antibiotics use.

Significant poultry news has emerged from Latin America in the last week so we turn our attention to that important and growing region today.

In Mexico, the latest avian influenza outbreak appears to be fuelling poultry market prices as the result of speculation. SourceMex reports that bird flu has returned to central Mexico again this year, this time causing significant poultry deaths in Guanajuato state.

The outbreak of the H7N3 virus - which had forced poultry farmers in the state of Guanajuato to destroy more than two million birds as of the end of February - is affecting municipalities in northern Guanajuato as well as in Jalisco state. (Numbers of culls quoted more recently exceed three million.)

SENASICA, the national food safety authority, said the outbreak originated at a broiler breeder farm, initially spreading to 17 breeder farms owned by the firm, Bachoco. The virus was later discovered on 20 other farms in the area.

Health authorities worked hard to prevent the disease from spreading to the neighbouring states of Aguascalientes and Jalisco, and the authorities are confident that the situation has now been stabilised, reports SourceMex but speculation is thought to be pushing up prices.

Mexico's secretary of the Economy has said that just 0.3 per cent of the total inventory of egg-laying chickens in Mexico had to be destroyed. Nevertheless, news of the outbreak almost immediately caused some price speculation for eggs and there was some concern that prices might also increase for chicken meat.

The National Service of Health, Food Safety and Quality (SENASICA) is planning to administer about 210 million doses of influenza AH7N3 vaccine per month in nine states across the country in order to prevent further outbreaks.

In Peru, a highly dynamic poultry industry will continue driving soybean imports and consumption. Higher prices and strong demand for corn, mainly from the poultry industry, are the driving force in this market, according to recent reports from USDA.

Brazilian poultry meat exports were lower in January 2013 than the same month last year but this was attributed to sales being particularly high in January 2012. Regarding exports to the EU, a new regime for certain prepared or processed poultry meat from Brazil to the European Union will make greater profitability a possibility for Brazilian exporters, according to the Brazilian government. Exports to China are forecast to increase following Chinese approval of five additional poultry processing plants in Brazil.

Turning to the more general global matters, world agrifood prices are expected to be 11.5 per cent higher in 2050 than 2007 and this increase is driven by stronger global demand stemming from increasing incomes and population and resource constraints that are likely to affect productivity increases.

According to a report from the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), with food security at the forefront of government policy agendas worldwide, much of the focus is on how the world will respond to a rise in food demand over the next 40 years.

Fish meal and oil, fish, meat, oilseed oils and cereals are forecast to experience the largest price rises over the projection period.

In the US, President Obama continues to seek a compromise to the latest US Congressional budget battle that will end the sweeping, across-the-board government spending cuts now taking effect.

In the US and Germany, the respective governments are moving towards a further tightening of controls over the use of antibiotics in farm livestock.

Jackie Linden

Jackie Linden

Top image via Shutterstock

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