USDA International Egg and Poultry
20 March 2013
Brazil’s broiler production is expected to recover and grow 2% in 2013 after a 1% decline in 2012. General opinion among trade sources is that Brazil’s economic growth is expected to recover from the poor result of 2012 and that estimated record Brazilian soybean and corn crops should help to mitigate the impact of rising feed costs. However, sources also identify other concerns that can adversely affect the poultry sector this year: a) squeezed profit margins for producers and processors due to rising feed costs may continue through the first half of this year; b) the high level of consumer debt in Brazil may also undercut domestic demand of animal proteins in general, and c) broiler exports are forecast to increase slowly because of the continued uncertainties in the world economy.
Brazil Broiler Meat PSD in 1,000 MT
The increase in the cost of broiler production in 2012 is estimated at a record of nearly 40 percent, while the producer price during the same period increased by 46 percent. These reference prices are for Parana state, the largest broiler producer in Brazil with a market share of nearly 28 percent of total broiler slaughter. The increase in the cost of production is basically due to higher feed costs, mostly corn and soybean meal.
Broiler exports are expected to increase by 3% in 2013, driven by higher sales of whole broilers, in general, and chicken parts to China and Hong Kong in particular. Trade sources also expect higher exports to Egypt and Iraq. Brazilian exporters currently have three major concerns affecting the outlook for broiler exports in 2013: a) despite the recent devaluation of the Brazilian currency, higher production costs of broilers during the second half of 2012 and first half of 2013 are expected to impact on the cost of exports; b) uncertainties derived from the world financial crisis, mostly in Europe, and its impact on importing markets will slow growth; and c) specific trade issues with major trading partners such as the Russian Federation (slow relisting of Brazilian poultry plants), Venezuela (payment defaults) and South Africa (application of antidumping tariffs on Brazilian broiler of 62.92% on whole broilers and 46.59% on chicken parts) will continue to negatively affect performance.
Brazil Broiler Meat Exports, in Metric Tons
Brazil exported broilers to 152 markets in 2012, of which nearly half went to five markets (Saudi Arabia, Japan, Hong Kong, United Arab Emirates, and China). Markets with major increases in 2012 included Egypt, which rose from 72,075 MT in 2011 to 119,326 MT in 2012 and South Korea, which grew from 25,562 MT to 65,296 MT during the same period.
Brazil Meat Consumption
Turkey production is projected to increase by 2% in 2012, mostly driven by a continued growth in exports. Rising feed costs combined with a slowdown in the growth of domestic demand are the main factors currently affecting production growth.
Brazil Turkey Meat PSD in 1,000 MT
Turkey exports are projected to continue to grow in 2013, but at a reduced rate of growth as the European Union is likely to slow imports from Brazil. In 2012, Brazil exported a record of 170,000 metric tons of turkey, of which the European Union accounted for nearly half of all exports.
Brazil Turkey Meat Exports, in Metric Tons
Source: USDA FAS GAIN Reports BR 0901 and BR 0801
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