Brazilian broiler production is expected to increase by 3 percent in 2014 stimulated by higher exports, according to this week’s “International Egg and Poultry Review” from USDA’s Agricultural Marketing Service (AMS) Poultry Programs. Domestic demand could be constrained by the high level of consumer debt in Brazil. USDA’s Foreign Agricultural Service (FAS) office in Brasilia believes that an unofficial production estimate at 13.1 million metric tons of production in 2014 reflects the current expectations of producers to continue with a strategy to adjust supply and demand for broilers.
Producers are likely to benefit from reduced production costs in 2014 as the estimated record soybean and corn crops will result in lower commodity costs. The only constraint affecting next year’s forecast is the slowdown in the growth path of domestic consumption because of the high level of indebtedness of Brazilian consumers and higher competition from beef and pork. FAS revised its unofficial 2013 broiler production to 12.7 million metric tons, which is a decrease of nearly 2 percent from the previous forecast at the beginning of the year, reflecting the problems faced by Brazilian producers. High feed costs during the first quarter of the year caused producers to adjust production by 5 percent to 10 percent.
FAS forecasts broiler exports in 2014 to increase by 5 percent. The growth in exports is likely to be driven by a devaluation of the Brazilian currency and higher sales of whole broilers, in general, and chicken parts to China and Hong Kong, in particular.
Exports to new markets, such as Mexico, are likely to begin during the second half of 2013. Trade sources also expect greater broiler exports to the European Union, Egypt, Nigeria, and Iraq. Brazilian exporters remain concerned with specific trade issues with major trading partners such as the Russian Federation (slow relisting of Brazilian poultry plants), Venezuela (payment defaults), and South Africa (application of antidumping tariffs of 62.92 percent on whole broilers and 46.59 percent on chicken parts) that continue to negatively affect performance. Brazilian exporters are also in the final stage of preparing support data for Brazilian officials to open a panel in the World Trade Organization (WTO) against Indonesia, which is resisting opening their market for Brazilian broilers.
During January-July 2013, total broiler exports reached 2.2 million tons, 3 percent lower than the same period in 2012. However, the value of broiler exports reached a record of US$4.5 billion, up 9.5 percent and a record for the period. The average export price increased by 13 percent, as compared to the same period last year and reached US$2,110 per metric ton. Major export markets for Brazilian broilers in 2013 remain the same as last year–Saudi Arabia, Japan, and the European Union.
AMS said the information used in its report is based on USDA’s FAS GAIN Report BR 0913.
