Poultry: challenges and expectations of a new record in exports

The economic recovery and government income support programs have contributed to the good performance of poultry farming. According to the Brazilian Association of Animal Protein (ABPA), initial projections for the sector indicate an increase of more than 3% in 2023 in per capita consumption of chicken meat, equivalent to 46.3 kilograms, compared to the 45.2 kilograms registered in 2022. Added to this is the expectation of a new record in exports, surpassing 5.2 million tons this year.

Brazilian exports of chicken meat (in natura and processed) totaled 2.629 million tons in the first half of the year, 8.5% above foreign sales made in the first six months of 2022. Accumulated revenue over the first half reached US$ 5.168 billion, a total that exceeds by 9.3% the numbers accumulated in the same period of last year, of US$ 4.728 billion.

See below the volume of Brazilian poultry meat exports measured in tonnes between Jan 2019 and May 2023. The data is from DataLiner.

Brazilian poultry meat exports | Jan 2019 – May 2023 | WTMT

Source: DataLiner (click here to request a demo)

In the survey by country, China remains the main destination, with 390.7 thousand tons imported between January and June, surpassing by 33% the result achieved in the first half of 2022. Next comes Japan, with 219.8 thousand tons ( +8.5%), United Arab Emirates, with 200.1 thousand tons (-18.3%), South Africa, with 189.7 thousand tons (+16.5%), and Saudi Arabia, with 176, 8 thousand tons (+8.4%). Among the States that export the most, Paraná remains in the lead, with 1.090 million tons, 11.1% above that recorded in the first half of 2022.

In the segment, the restrictive measures are varied and are generally related to the protection of the market itself, such as the regulation that the European Union imposes for the importation of the poultry product from Brazil. “But there are low effects on the overall performance of exports, which remain at record levels”, says Ricardo Santin, president of ABPA.

Avian flu brings concerns. One of the effects of the registration of the disease in Brazil in June was the temporary suspension of shipments to Japan of products departing from Espírito Santo, after the occurrence of a case of influenza in a homemade farm in the municipality of Serra. The State has a share of only 0.19% of the total exported by Brazil, but the impact is a loss to the image of the Brazilian product abroad.

“As the world leader in chicken meat exports, Brazil, which exports to more than 145 countries, has been negotiating better conditions for operating in markets such as India (which applies tariffs that make shipments unfeasible) and Indonesia (on which we move and gain panel at the World Trade Organization, but which is still closed)”, says Santin.

Despite the good moment, poultry farming still faces the consequences of years of high production costs. Although today they are at lower levels, the price of corn and soybean meal, used in poultry feed, accumulated between 2020 and 2022 increases of more than 150%, and added to other problems, such as the rise of diesel, cardboard , polyethylene and other inputs. “The situation is a little more favourable, but the effects of the recent drops in the price of corn and bran will still take time to be felt, since the stocks used today to feed the animals were acquired earlier”, clarifies Santin.

For the GTFoods Group, which has been in the market for 30 years and which has Mister Frango among its brands, the year after a presidential election is a period of caution in consumption, which generates a decrease in demand. Prices for chicken cuts have fallen by more than 20% from the end of last year to now. “This year started with little gondola turnover, few purchases in the market, but this scenario has been adjusting. The main products sold by us, in the domestic and foreign markets, were breast fillets, thighs and drumsticks. This year’s great challenge for Brazilian poultry farming is the avian flu. So companies that were already doing prevention work, like GTFoods, redoubled these precautions, and the sector works together so that the disease does not spread”, says Rafael Tortola, CEO of the company.

For João Campos, CEO of Seara, a JBS group company and leader in chicken exports, 2022 was a challenging year due to the strong variation in the price of agricultural commodities. “The scenario changed in 2023, we grew 9% in net revenue in the first quarter of this year, a result driven by the domestic market, with emphasis on the 13% increase in sales of prepared foods. Our priority is to increasingly reinforce our value-added portfolio. Along these lines, in March, we inaugurated the largest and most automated JBS unit for the production of breaded chicken in the city of Rolândia, Paraná, with an investment of R$ 1 billion.”

Neivor Canton, president of Aurora Coop, also defines the current moment as challenging. “In the domestic market, the drop in family income caused by the unemployment rate and other factors inhibit the expansion of consumption. Logistical and production costs remain high. In the foreign market, despite the record volume of sales – Aurora exports approximately 38 thousand tons of poultry meat per month –, the prices practiced fell due to the high supply of animal protein. The association of these conditions leads to a situation of negative margins.”

According to Canton, in the domestic market, the logistics issue strongly impacts the results, as a result of infrastructure deficiencies (roads, ports, warehouses, etc.), in addition to production costs and the high tax burden. “These shortcomings end up reducing the competitiveness of Brazilian products abroad.” Despite these factors, the President of Aurora says he believes that the picture should change this semester, with the increase in sales in the domestic market and the recovery of prices in the international market.

Source: Valor Econômico

To read the original article, visit: https://valor.globo.com/publicacoes/especiais/revista-agronegocio/noticia/2023/07/31/avicultura-desafios-e-expectativa-de-novo-recorde-nas-exportacoes.ghtml

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