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 at Brazil.
Brazil
Brazil produced 9.08 million metric tons (MMT) of broilers in 2005 and
exported 2.84 MMT, over 30% of the country’s total poultry production.
Brazil and the United States combined supply approximately 70 percent
of global poultry trade (37.5% and 32.1% respectively). Recent cases
of avian influenza in Europe, the Middle East and Africa have led to
irregular patterns of poultry consumption. The United Nations Food
and Agriculture Organization (FAO) revised projection for 2006
consumption is 81.8 million metric tons, almost 3 million tons lower
than the previous projection of 84.6 MMT and slightly lower than 2005.
Estimates for 2005 consumption were 82.0 MMT.
Japan is Brazil’s largest market for broiler exports, followed by the
European Union. Saudi Arabia is the third largest broiler market. Exports
to Japan and the EU are mostly broiler parts, exports to Saudi Arabia
are mostly whole broilers. The EU market accounted for nearly 80% of
all processed broiler exports from Brazil in 2005.
Brazilian chicken meat exports fell 8% in February 2006 when compared
to a year earlier and was 7% lower than January 2006. European sales
were down on fears of outbreaks of avian influenza in Europe. The drop
in exports led to higher domestic inventories and lower prices. Prices
fell up to 30% in some localities as product filled cold storage facilities.
Lower prices led to higher per capita consumption in Brazil. January
and February per cap consumption totaled 42 kg compared to 35.4 kg
in 2005. Brazil’s poultry industry is reducing short-term production by
as much as 25%. Some companies are canceling plans for investment
in plant expansion and layoffs are widespread.
Domestic supplies grew to about 300,000 tons of chicken, equivalent
to three weeks consumption. Normal supplies are for 10 days of
consumption. Cold storage facilities are full and producers are running
out of places to store chicken. In addition to large inventories in Brazil,
about 200,000 tons of Brazilian chicken is stored in import countries,
equivalent to about one month of exports. A Brazilian meat exporter
said EU chicken importers were not renewing Brazilian contracts
because fear of bird flu has caused EU poultry consumption to drop.
Prices on chilled chicken fell from R$ 1.73 per kilo in December, 2005
to R$ 1.32 per kilo in February, 2006. Live chicken prices fell from R$
1.00 on January 13 to the current price of R$ .95 and offers at R$ .80
from one company. It costs R$ 1.20 to produce a kilo of live chicken.
Source: FAPRI, UN Food and Agriculture Organization, news wires
EU Compensation for Poultry Producers
The European Commission tabled a proposal to allow the EU budget
to share the cost of market support measures in the eggs and poultry
sector. Current regulations only allow the EU to co-finance
compensation measures when there is a case of avian influenza on a
farm or where farmers are prevented from moving their poultry because
of restrictions imposed on veterinary orders.
Consumption of poultry and eggs fell dramatically in the member states
after avian influenza appeared in Europe. Prices fell sharply and export
markets around the world totally or partially blocked poultry products
from several countries in the EU.
The only current market support measures available are export
subsidies. The Commission proposes to co-finance 50% of the cost of
market support measures linked to a drop in consumption and prices
of eggs and poultry. The legal change will have to be approved by the
European Parliament and by EU farm ministers, probably when they
meet on April 25, 2006.
France also wants the EU to subsidize private storage of poultry meat,
compensate for stocks that can no longer be sold and for early poultry
slaughter if export markets suddenly collapse. Poland has requested
new subsidies for poultry slaughter and processing, aid for storage
and more poultry products added to the list of items that qualify for EU
export subsidies.
Source: European Commission Press Release, new wires
To view the full report, including tables please click here
Source: USDA's Agricultural Marketing Service - 4th April 2006