Brazil's chicken meat production is set to increase further,
with rising global demand for the product and disease disrupting output in some
countries, said a USDA report.
Broiler production in Brazil is forecast to grow by 2.6% to
13.8m tonnes in 2018 from the 13.44m tonnes in 2017, and to be 6.45% up on 2016's
USDA analysts point to continued firm world demand for Brazilian
product, due to the effect of Avian Influenza in several countries. Domestically,
demand is set to improve by up to 1.5% in line with economic recovery in
Brazil, with lower inflation and some growth – albeit weak, following several
years of negative GDP.
At the same time, reduced feed costs as a result of record corn
and soyabean crops will cut production costs. With these two feed ingredients accounting
for some 70% of the cost of producing broilers, producers and packers in Brazil
are "cautiously optimistic" that profit margins will continue to improve,
despite currency effects.
Record corn and soya for 17/18?
The Department projected that 2017/18 corn and soya crops
yields will "likely set another record in production due to the large use of
biotechnology and subsidized credit".
The analysts expect chicken prices in Brazil to remain
competitive with beef and pork prices, with "more intense competition" from
beef in 2018.
The USDA predicted that Brazil's broiler exports will
increase by 5% in 2018 to 4,500 tonnes, through a combination of competitive pricing
and replacing production lost to Avian Influenza. The rate of growth could be
constrained by higher world broiler stocks in major importing countries.
This year's exports have suffered from the temporary import
bans imposed by some countries on Brazilian meat products, following the
bribery scandal that emerged in March this year involving industry and government
inspectors in some meatpacking plants. This especially affected exports to the
Middle East and Asia.
"Cautious optimism" after corruption scandal
"Poultry exporters are cautiously optimistic that Brazil has
recovered its reputation due to MAPA's (government) changes to their export
system" noted the USDA. "However, while the volume of exports decreased for CY
2017, the value increased by 7% reflecting high world prices."
Brazil's exporters are confident that export volumes to China
and Hong Kong will recover, as will trade with Middle-East countries including Egypt,
the UAE and Kuwait.
Within South America, exports to Mexico and Chile are
expected to grow, but Venezuela's political and economic crisis means it may be
unable to pay for imported product.