Brazil – Poultry and Products Annual – 2011

Broiler production in 2012 is forecast to increase by five per cent to reach another record of 13.6 million metric tons, while turkey production and exports are expected to slow down next year, according to João F. Silva, in the latest GAIN report from the USDA Foreign Agricultural Service.
calendar icon 23 September 2011
clock icon 6 minute read

Executive Summary

Post forecasts broiler production to increase by five per cent in 2012, reflecting a general opinion among economic analysts that Brazil’s economic growth is expected to remain firm in 2012, although at a lower rate, and a continued high level of domestic consumption, including animal proteins, derived mostly from the new Brazilian middle class. However, there are three major economic concerns with the economy: high interest rates, valuation of the Brazilian currency and rising inflation.

Despite the uncertainties of the world economy due to the debt crisis in Europe and in the United States, trade sources also forecast broiler exports to increase by five per cent next year as a result of higher exports, especially to the Middle East, and other emerging markets. The outlook for turkey production and exports is for less growth than previous years.

There are changes to the USDA's S&D for broiler in 2011 to reflect new data released by our trade sources.



Post forecasts broiler production in 2012 to increase by five per cent and reach another record of 13.6 million metric tons (MMT). The forecast reflects general optimism among producers and traders that the Brazilian economy will continue to increase in 2012, although at a lower growth rate but lower unemployment rate and rising household income, will likely maintain domestic demand for broiler firm. Brazilian traders also believe that rising income in the emerging markets will maintain demand for animal proteins relatively strong next year. In addition to these factors, broiler producers, mostly those under integration systems, expect to have positive returns as feed prices are likely to remain stable in view of higher corn and soybean supplies. The federal government can also use estimated higher corn stocks through auctions where the government subsidises the transportation costs from the major producing areas in the Centre-West regions to the poultry producing areas in the Northeast, thus reducing the pressure on corn prices to the main poultry producing areas of the Southeast of Brazil.

Production costs

Feed prices are projected to remain stable during the 2011-12 with estimated record soybean and corn crops, as the new crop plan announced by the federal government makes available US$67 billion in subsidised funds to boost production of grains and oilseeds during the coming crop year (1 October 2011 to 30 September 2012). Also of note is that Brazil will be producing a large amount of biotech (genetically modified; GM) corn. Trade sources estimate that up to 75 per cent of the crop is likely to be biotech, which is expected to increase yields. In 2011, some broiler producers also begin to use sorghum as an alternative feed source for high-priced corn. Although this trend is expected to continue in the future, the substitution is not expected to displace traditional feed sources and it is more focused on non-integrated poultry producers outside of the main producing areas.


Broiler meat consumption continues to grow because of the rising domestic demand for animal protein, of which broiler meat benefits most due to the relatively lower prices for boiler meat compared to other kinds of meat, particularly beef. Domestic demand for animal protein continues to rise in Brazil due the estimated 33 million people who since 2003 have risen to the ranks of the so-called ‘new middle classes’ or above. Today, 105 million Brazilians out of a total population of 195 million are members of this group.


Broiler exports are forecast to increase by five per cent in 2012, another record. The growth in exports is likely to be driven by higher sales to the Middle East. Brazilian traders also estimated a continued increase in their exports to their traditional markets such as Japan, Saudi Arabia and the European Union. The strategic focus of the largest Brazilian poultry processor and exporter (BRF) is the Middle East where the company announced a total investment of $120 million to build a processing plant in the United Arab Emirates with a total processing capacity of 80,000 metric tons (MT). The strategy in the Middle East, which accounts for nearly 32 per cent of the company’s exports, is to produce further processed broiler products. Market promotion efforts will continue in their traditional markets in the Middle East, Europe and Russia but it will incorporate market activities in new open markets in Malaysia, Indonesia and Africa.

Brazilian poultry exporters also have some constraints for 2012. In addition to the valuation of the Brazilian currency and the impact of the current debt crisis in Europe and the United States, there are some specific concerns with Russia and Venezuela. The de-listing of Brazilian plants (beef and pork) by Russian officials is a major non-resolved issue between the two countries which will mostly affect the 2011 exports, but with an estimated negative impact in next year’s exports. Venezuela has become an instable market for Brazilian meat exporters in general due mostly to delinquent payments.

Trade data for 2011 has been revised to show an increase of more than six per cent in the volume of broiler exports, mostly due to higher exports to Saudi Arabia, Japan, Hong Kong, China and the European Union. However, the value of Brazilian broiler exports in 2011 will likely increase by over 20 per cent, reflecting a major increase in the average export price of chicken from US$1,660 per metric ton in 2010 to US$2,020 in 2011.


The Brazilian antitrust regulator (CADE) approved the merger of Sadia and Perdigão, Brazil’s two largest food processors to create Brazil Foods SA (BRF). The new company will hold approximately 35 per cent of the domestic market share and more than half of the export market.



The Brazilian turkey market is forecasted to slow down its growth in 2012 due to weaker export forecast compared to previous years. Domestic demand for turkey is basically supporting an increase in production, although consumption of whole turkey remains highly seasonal in Brazil. Changes have been made in turkey production in 2011 to include new data provided by the Poultry Producers Association and to reflect a major drop in turkey exports.


The outlook for turkey exports in 2012 calls for shipments to new markets in Asia such as Malaysia and Indonesia for the Brazilian product. Traders also expect to increase exports to the European Union after a major drop in 2011.

Further Reading

- You can view the full report by clicking here.

September 2011
© 2000 - 2024 - Global Ag Media. All Rights Reserved | No part of this site may be reproduced without permission.