Brazil’s poultry industry will cull 24 million chickens a day starting yesterday if suppliers cannot get food to birds because of a truckers’ strike, and the government will need to bail out the hardest-hit producers, the agriculture minister said on Wednesday.
Brazil, the world’s top chicken exporter, could see a collapse in the poultry sector if the 1.2 million birds that are key to breeding are culled, Agriculture Minister Blairo Maggi said on Wednesday. It could take the industry over two years to recover if that happens, Minister Maggi said.
“If we lose those birds, we lose all ability to recover,” he told reporters, in remarks translated from Portuguese. “I am very concerned about the livestock sector.”
Truckers striking over high fuel prices have choked Latin America’s largest economy for over a week, leading to fuel and food shortages and hammering exports of everything from soy to beef and cars.The livestock industry has already lost an estimated 1.3 billion reais ($348 million) because of the strike, Maggi said.
He estimated some 64 million birds had already been culled, a figure a little below the industry estimate of over 70 million. Brazil had about 1 billion chickens before the strike. Some producers will have lost their working capital and would need financial assistance, Maggi added. The government would fund any credit it gives to the poultry industry through the existing budget, delaying spending elsewhere, he said.
Soy exporters have ships stuck at anchor because they have no soybeans to load at the main ports, Maggi said. He was unable to quantify the cost of delayed shipments to the industry, but said it would be “very large”.
ADM spokeswoman Jackie Anderson told Reuters that trucks are slowly starting to move in Brazil, and the company was already carrying out some shipments. “Though the recent disruption is still impacting the arrival of raw material to our local processing facilities and ports, and our ability to ship soybeans and finished products to our domestic and export customers, we expect to return to normal operations soon if the situation continues to progress,” Anderson said.
Cargill is monitoring the situation closely and remaining in communication with its customers, a company spokesman told Reuters. The global grain trader has four grain export terminals in Brazil, including one it jointly operates with Louis Dreyfus Co.
Brazil is the world’s top soy exporter, and its top buyer is China. Brazil has benefited from a trade dispute between the United States and China as Chinese buyers have sought more cargoes from Brazil as they reduce trade with the United States.
But Maggi said, in the long run, the trade dispute could harm Brazil. U.S. soy exporters would seek to sell more in other markets, possibly taking business away from Brazil, he said. If the U.S. and China later resolve their differences and soy trade picks up, Brazil could lose out, he said.
There was no quick fix to European Union restrictions on imports of Brazilian chicken, because the standards the EU had imposed on the occurrence of salmonella in Brazilian shipments were very difficult to meet, Maggi said.
