Brazil Poultry and Products Semi-Annual Overview - February 2005

By the USDA, Foreign Agricultural Service - This article provides the poultry industry data from the USDA FAS Poultry and Products Semi-Annual 2005 report for Brazil. A link to the full report is also provided. The full report includes all the tabular data which we have ommited from this article.
calendar icon 19 February 2005
clock icon 7 minute read
Brazil Poultry and Products Semi-Annual Overview - February 2005 - By the USDA, Foreign Agricultural Service - This article provides the poultry industry data from the USDA FAS Poultry and Products Semi-Annual 2005 report for Brazil. A link to the full report is also provided. The full report includes all the tabular data which we have ommited from this article.

Report Highlights:

Post revised production estimates for 2004 and 2005 to include final data obtained from the trade. Broiler production and exports reached record levels in 2004, and will likely set other records in 2005. Production and exports are estimated to increase at a lower rate this year as the Brazilian currency strengthens and exports decline. Higher production costs in 2005 will likely reduce producer’s profit margins. Post also revised production and export data for turkeys to reflect final numbers for 2004.

Executive Summary

Brazilian broiler production is estimated to increase in 2005, but at a lower rate than previously forecast. The increase in broiler production will likely be driven by higher domestic demand and a smaller increase in exports. Economic analysts foresee economic growth in the range of 4-5 percent, lower inflation, a drop in unemployment and higher real income. These indicators are likely to influence consumer confidence as domestic consumption supports the economic growth in 2005. Last year, exports accounted for most of the growth in the GDP.

Market analysts are also cautious because of the high interest rates in Brazil (prime rate) and the appreciation of the Brazilian currency relative to the U.S. dollar (currently averaging 12 percent). Brazilian poultry exporters believe that the current Real/U.S. Dollar exchange rate (US$ 1.00 = R$ 2.70) will adversely impact exports of broilers in 2005. Currently, they are forecasting a smaller increase in exports and lower profitability due to the relative increase in production costs.

This report also updated PS&D table for Turkey to reflect final export data for 2004. There are no other significant changes for Turkey.

Production

Post revised estimated broiler production in 2005 to 8.8 million metric tons, up 5 percent from the record production level of 8.4 million metric tons last year. The increase in production reflects the following factors: a) higher employment rate and consumer purchasing power as the economy improves and will likely boost domestic demand for broilers; b) additional federal funding for social programs to fight hunger and improve nutritional levels of the poor will help increase broiler demand – the lowest priced source of animal protein; c) Expansion in the export market will likely continue in view of the animal health problems faced by different countries, mostly the Avian Influenza crisis in Asia and the impact of the BSE cases in Canada and the United States; d) continued expansion of broiler exports to new markets, such as Korea; and, e) continued market promotion efforts jointly conducted and financed by the Brazilian government agency for market promotion.

The major constraints that could adversely affect broiler production and exports are: a) appreciation of the Brazilian currency; and, b) higher domestic interest rates combined with higher production costs that will likely reduce producer’s profit margins.

Post also revised broiler production in 2004 to reflect final production data obtained from the trade. In 2004, broiler production reached 8.4 million metric tons, up 10 percent from the previous year. Booming chicken exports and a small recovery in domestic consumption accounted for most of the increase in production last year. Broiler producers also increased their profit margins in 2004. The average price received by producers for chicken (16-wks), per kilogram, live weight, was US$ 0.50 in 2004, up 6 percent in dollar terms from the previous year. This reflects stable prices for soybean meal and corn to poultry producers.

Trade

Post reduced the projected increase in broiler exports to 5 percent in 2005 as opposed to a significant increase of 26 percent in volume during 2004. The reason for this small increase in 2005 is basically derived from the appreciation of the Brazilian currency (about 12 percent over the 12 month period ending in January 2005) and an anticipated decline in broiler exports to Russia.

Review of Exports in 2004

Brazilian broiler exports in 2004 increased by 26 percent in volume (2.4 million metric tons against 1.9 million metric tons in 2003) and 44 percent increase in value (US$ 2.6 billion, against 2003.) This performance made Brazil the largest broiler exporter in the world in 2004, both in volume and value, with a 43 percent share of world’s broiler market, up from 33 percent in 2003. Brazilian exporters increased the number of markets for their products to 134 countries in 2004, up from 122 in 2003.

Whole broiler exports reached 975 million metric tons, with an increase of 22 percent over 2003, valued at US$ 802 million, up 30 percent from 2003. The average price for whole broilers exports in 2004 was US$ 823 per metric ton, up 6.3 percent over the previous year. Exports of broiler parts reached 1.4 million metric tons, up 29 percent over 2003, valued at US$ 1.7 billion, with a significant increase of 55 percent from 2004. The average price for broiler parts in 2004 reached US$ 1,167 per metric ton, up 20 percent from the previous year. This confirms Brazilian broiler exporters strategy to increase profitability by focusing on higher value products, such as broiler parts and further processed products which increase by 20 percent in volume and reached 45,176 metric tons in 2004, value at US$ 110 million, up 13 percent from 2003.

Major export markets in 2004

Saudi Arabia is Brazil’s largest single export market, mostly for whole broilers. In 2004, Saudi Arabia also increased imports of Brazilian broilers by 6 percent in volume, and 30 percent in value. Saudi Arabia also accounted for 44 percent of all Brazilian broiler exports to the Middle East last year.

Japan is the second largest market for Brazil’s broiler exports, mostly broiler parts (53 percent). Exports to Japan in 2004 increased by a significant 75 percent in volume, and by 115 percent in value. Problems with Avian Influenza in Asia explain most of the increase in exports to Japan.

The European Union remains as the third market for Brazilian broiler exports, mo stly broiler parts, despite the drop of nearly 9 percent in exports in 2004 because of the 75 percent tax on salted broiler breasts. The European Union dropped the mandatory (100 percent check) Nitrofuron inspection on Brazilian broiler imports.

Russia was the 4th largest market for Brazilian broiler exports in 2004 despite quota restrictions. Shipments to Russia totaled 200,944 metric tons, a small drop of one-half percent from 2003. However, the value of broiler exports to Russia increased significantly by 27 percent and reached US$ 160 million. Due to animal health problems faced by Brazilian competitors, exporters were able to ship broilers to Russia above the quota assigned to “other” sources at 68,000 metric tons. According to Brazilian exporters, the ban on all Brazilian meat imports imposed by the Russian government on September 20, (because of a FMD outbreak in the Amazon) restrained Brazilian exporters from exporting more volume of chicken to Russia in 2004. The ban was partially suspended on November 16 when the state of Santa Catarina resumed exports to Russia. Santa Catarina is the leading producer of broilers and pork in Brazil.

African countries, mostly Angola and South Africa are becoming important markets for Brazilian broilers. In 2004, Brazil exported to all African countries 181,000 metric tons, up 49 percent in volume and valued at US$ 114 million, or 90 percent higher than 2003.

Further Information

To read the full report please click here

List of Articles in this series

To view our complete list of 2005 Semi-Annual Poultry and Products Semi-Annual reports, please click here

Source: USDA Foreign Agricultural Service - February 2005
© 2000 - 2024 - Global Ag Media. All Rights Reserved | No part of this site may be reproduced without permission.