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Argentina's Poultry Industry Expected to Benefit from Lower Feed Costs

29 September 2016

ARGENTINA - Argentina's broiler production is expected to rise in 2017 by 3 per cent from 2016 levels, according to the latest report from the US Department of Agriculture's Foreign Agricultural Service (FAS).

However, expected production levels for 2016 were revised down in the report because of lower production during the first half of the year.

The temporary exit of Cresta roja (the second largest producer for Argentina, which declared bankruptcy in December 2015) from December 2015 until March 2016 made a dent in total broiler meat production for Argentina. Production is expected to accelerate as Cresta Roja’s reinsertion in the market will increase the country’s production levels during the second half of the year.

The expected production increase in 2017 is driven by stronger exports as a result of the strong work Argentina is doing in order to open new markets, FAS said. The domestic market has practically reached its ceiling and there is little room for further expansion in domestic consumption.

Moreover, cattle herd expansion is expected to lead to a recovery in per capita consumption of beef around 53.5 kg. While broiler meat consumption has risen tremendously over the past decade because of its price competiveness, beef is Argentines’ preferred meat choice.

Production costs were higher this year due to various policy and economic effects, but FAS predicted costs will moderate as economic forecasts point to lower inflation for 2017.

More importantly, feed costs are expected to decline as Argentine corn production is forecast to increase by 30 per cent for the 2016/2017 season. This development, along with higher corn production in other key producing countries, is expected to put downward pressure on corn prices – the main component of feed rations for the Argentine poultry sector.

Further Reading

You can view the full report by clicking here.

ThePoultrySite News Desk



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