Brazil revises poultry production outlook
Poultry production in Brazil is going to slow down this year as production costs are getting higher than anticipated. "The level of costs was higher than we anticipated and the economic recovery in these first months was below our expectations. Still, we are not talking about a drop in production compared to last year, but a slowdown in growth," the president of the Brazilian Association of Animal Protein (ABPA) Ricardo Santin said in a statement for Broadcast Agro. To circumvent the costs, companies have taken some measures, such as reducing the housing of broiler chicks and shortening the average age of slaughtered chickens. For now, the state of Rio del Sul, one of the largest poultry producers in the country is talking about reducing accommodation in poultry farms by 30%, 15%, or 10% depending on the market in which the companies are selling their products. The most exposed producers are those who are supplying the domestic market, while exporters may hold on longer because the exchange rate effect helps to alleviate part of the increase in costs. In Santin's view, the tightest months will be April and May, while lots of off-season corn do not enter the market. In July, the president of ABPA already expects a reduction in costs and a greater resumption in domestic consumption. "Demand from the domestic market has slowed, but remains strong, mainly because of the movement of substitution in protein consumption that started with the coronavirus pandemic," he recalls.
As a result, the outlook for production growth for 2021 was revised downward from 5.5% to 3.3%, according to ABPA.
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