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Brazil Broiler Production Forecast to Increase Despite High Feed Prices

06 September 2016

BRAZIL - Brazil's broiler production is forecast to increase by 3 per cent in 2017, to 14 million metric tons, according to the latest forecast from the US Department of Agriculture's Foreign Agricultural Service (FAS).

This increase is mostly driven by higher world demand for the Brazilian product, especially after the impact of the avian influenza in several countries and continued increasing broiler exports to China. In addition, domestic demand for boilers should improve in 2017 as the Brazilian economy is projected to grow and inflation is likely to be under control.

Feed prices remain as the main constraint for production, due to the lower corn crop and the volatility of the Brazilian currency.

The second Brazilian corn crop suffered from a longer dry spell which caused a price surge in corn of more than 88 per cent this year, and prompted the government to reduce the import tariff for corn from non-Mercosul suppliers, such as the United States. In addition, the federal government began sales of corn from public stocks.

However, large packers benefit from lower-priced corn imports and subsidised government bids from public corn stocks. Independent producers are being more affected by the shortage of corn than those integrated producers. In general, broiler producers intensified the use of wheat as an alternative to reduce high-priced corn.

In addition, competition from beef prices is expected to be more intense, as the gap between beef and chicken prices narrow, although broilers remain as the most affordable animal protein in the country.

Domestic consumption of broiler meat in Brazil is expected to rise by 2 per cent, as economists are beginning to see signs of recovery in the Brazilian economy.

ThePoultrySite News Desk

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