International Egg and Poultry Review - By the USDA's Agricultural Marketing Service - This is a weekly report looking at international developments concerning the poultry industry, this week looking Brazil and Argentina's recent E.N.D-free status.

Brazil

Broiler meat production continued to expand, increasing from 8.41 million metric tons (MMT) in 2004 to an estimated 9.36 MMT in 2005 and are forecast to reach 10.04 MMT in 2006. Brazil's poultry exports topped $3.5 billion in 2005, up 35 percent from $2.6 billion in 2004. The increase in broiler production will likely be driven by higher domestic demand and a smaller increase in exports compared to last year. Higher domestic interest rates combined with higher production costs could reduce producer profits.

Economic analysts foresee economic growth in the range of 4 percent, lower inflation, a drop in unemployment and higher real income. These indicators are likely to influence consumer confidence as domestic consumption supports growth in 2006. In addition, because of an election year, 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 in Brazil. Broiler exports are projected to reach nearly 3 MMT in 2006, up 5 percent compared to a 15 percent increase in volume in 2005. Exports are likely to be under pressure due to the strength of Brazilian currency relative to the U.S. dollar and a possible drop in poultry consumption in some world markets due to concerns with the spread of Avian Influenza.

In 2005, Japan became the largest market for Brazil’s broiler exports, mostly broiler parts. Exports to Japan increased by 24 percent in volume, and by 34 percent in value. Problems with Avian Influenza in Asia explain most of the increase in exports to Japan. The European Union was the second largest market for Brazilian broiler exports, mostly broiler parts, with an increase of 24.9 percent in volume, and 34 percent in value. The increase in broiler exports to the European Union also reflects a significant increase in exports of processed broilers. The European Union market accounted for nearly 80 percent of all processed broiler exports from Brazil.

Saudi Arabia, traditionally Brazil’s largest single export market for poultry, now ranks third. In 2005, Saudi Arabia increased imports of Brazilian broilers, mostly for whole broilers, 14 percent in volume and 38 percent in value. Saudi Arabia also accounted for nearly 45 percent of all Brazilian broiler exports to the Middle East. Russia remained as the 4th largest market for Brazilian broiler exports in 2005 despite quota restrictions. Shipments to Russia totaled 258,187 metric tons, up 34 percent from 2004. The value of broiler exports to Russia was significantly up in 2005 by 65 percent, reflecting a larger increase in broiler parts.
Source: USDA/FAS

U.S. Adds Argentina to the List of Regions Considered Free of Exotic Newcastle Disease

On January 30, 2006 the Federal Register posted an announcement adding Argentina to the list of regions considered free of exotic Newcastle disease. Argentina was also added to the list of regions that, although declared free of exotic Newcastle diseases, must provide an additional certification to confirm that any poultry or poultry products offered for importation into the U.S. originate in a region free of the disease. Certification must also ensure that prior to importation into the U.S. the poultry/poultry products were not commingled with poultry/poultry products from regions where exotic Newcastle disease exists.

Argentina has great expectations for the opening of the U.S. market. Traders believe the market will move slowly, with many things to learn and adjust. Frozen breasts seem to have the greatest market potential. Argentina's major export markets are China, Chile, South Africa, Germany, The Netherlands, Saudi Arabia and Russia. China is Argentina’s largest poultry market volume wise, mainly chicken paws and wings. In 2005 Argentina exported 20,035 tons of poultry byproducts to China valued at $12.4 million.

Chile and Argentina have a private agreement to limit Argentine poultry exports to about 1,000 tons a month. In 2005 chicken meat exports to Chile totaled 14,948 MT ($15.4 million). Argentina exported 7,176 MT of chicken meat and 5,161 of poultry by-products to South Africa in 2005, with a value of $9.9 million. Chicken meat exports to Germany totaled 5,569 MT ($12.2 million), The Netherlanlds 5,562 MT ($9.6 million), Saudi Arabia 6,027 MT ($6.7 million) and Russian 8,297 MT ($8.9 million).
Source: Federal Register, USDA/FAS, Senasa Argentina

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Source: USDA's Agricultural Marketing Service - 7th February 2006