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USDA GAIN: Poultry and Products

23 February 2012

USDA GAIN Brazil Poultry and Products Semi-annual February 2012USDA GAIN Brazil Poultry and Products Semi-annual February 2012

Post revised downward broiler production estimates for 2012 to 13.3 million metric tons, still a new record and up 3 percent from 2011. The increase in production is mostly driven by domestic demand and a small recovery in exports. It reflects a conservative estimate by our industry sources in view of world economic uncertainties impacting some major Brazilian export markets, as well as some issues with some trade partners. Post also revised 2011 broiler and turkey production estimates to reflect final production and export data.

USDA GAIN: Poultry and Products


Poultry, Meat, Broiler


Broiler production is now estimated to grow by only 3 percent in 2012, as compared to an initial forecast of 5 percent growth. Production estimated at 13.3 million metric tons reflects the current view of industry leaders given the world economic uncertainties derived from the European Union financial crisis and its impact on Brazilian broiler export markets. In addition, the production growth has slowed due to an overvalued Brazilian currency and restrictions from trade partners. Another important factor is a slowdown in the rate of growth of domestic consumption combined with higher costs of production due to higher corn prices. Post revised 2011 broiler production to 12.8 million metric tons, 4.5 percent higher than 2010 to show new data obtained from the industry.


Domestic consumption of broiler meat in 2012 is projected to increase by 3 percent to 9.9 million metric tons, which is below our initial forecast of 10.1 million metric tons. Post’s estimate reflects continuing increases in disposable income of Brazilian consumers. Broiler meat still remains the most affordable lower-income consumers compared to beef and pork. However, high debt-to-income ratios among Brazilian consumers have been reported as a growing concern among our trade contacts. This situation could inhibit further increases in consumption.


Post also revised downward from 5 to 3 percent the outlook for broiler exports in 2012. The growth in exports is likely to be driven by higher sales of whole broilers in general, and chicken parts, in particular, to China and Hong Kong. Trade sources also expect higher exports to Egypt and Iraq.

Nonetheless, Brazilian exporters have currently three major concerns affecting the outlook for broiler exports in 2012: 1) the continued overvaluation of the Brazilian currency, although this factor did not prevent record exports last year; 2) uncertainties derived from the world financial crisis, mostly in Europe, and its impact on importing markets; and 3) specific issues with major trading partners such as the Russian Federation (slow relisting of Brazilian poultry plants) and South Africa (application of antidumping tariffs on Brazilian broiler of 62.92% on whole broilers and 46.59% on chicken parts). South Africa was the 7 th largest market for Brazilian broiler exports in 2011 with shipments of 195,416 metric tons (PWE).

Post updated trade data for 2011 to include final official export numbers. In 2011, the total volume of broiler meat exports, including chicken feet and paws, reached 3.7 million metric tons, an increase of 3.3 percent from 2010. However, the value of exports increased by 22 percent to US$ 7.6 billion due to the increase in the average price of broiler meat in the world market.

Broiler export markets with major increases in 2011 were China (up 61%), followed by Angola (up 38%) and Iraq (up 28%), while markets with major declines were the Russian Federation (down 58%) and Egypt (down 42%). The decline in exports to the Russian Federation was a result of significant number of Brazilian poultry plants delisted by Russian officials, while the decline in Egypt was due to logistical problems associated with the political instability in the country last year.

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