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International Egg and Poultry Review: Brazil

by 5m Editor
7 April 2010, at 12:40p.m.

BRAZIL - This is a weekly report by the USDA's Agricultural Marketing Service (AMS), looking at international developments concerning the poultry industry. This week's report analyses Brazil's drop in broiler exports in 2009.

Brazil’s poultry exports have suffered from the global economic crises and credit crunch. In 2009, exports were down in volume and value compared to the previous year. Poultry exports were also hampered by a strong Real versus a weak US$, which restricted competitiveness. However, lower corn prices resulted in wider margins of profit. In 2010, the USDA’s Office of Global Analysis forecasts Brazil’s broiler meat production to increase four per cent and exports grow six per cent to a record of over 3.3 million tons. This compares to US exports, which are forecast five per cent lower in 2010, at 2.9 million tons.

Broiler producers cut back production by three per cent during the first quarter of 2009. Producer profit margins were higher in the first half of 2009 due to lower input prices, primarily corn, stable exports, and firm domestic demand. Brazil’s 2009/2010 corn production is projected at 51 million metric tons (MMT), the same production level as last year even with a seven per cent reduction in planted area. Sindiracoes, the Brazilian Feed Associate, estimates total Brazilian feed production in 2008 at 59 million tons, of which poultry production used about 33 million tons.

In May 2009, Brazil instituted new tax incentives (the Integrated Drawback) for exporters (mainly agri-businesses); consisting in the elimination of the IPI value-added tax (five per cent), or the PIS/Cofins social contribution on the basis of the turnover (9.5 per cent) on purchases of inputs (local and imported) to be used in the manufacture of exported products. The benefit is mostly to products that use corn, soybeans, feed, drugs and packing and other inputs of the production process, such as poultry. FAPRI’s 2010 Agricultural Outlook expects Brazil’s fiscal incentives and subsidies from local government to continue and to encourage large new investments in broiler production.

Source: USDA FAS GAIN Reports; USDA FAS Livestock and Poultry: World Markets and Trade; WTO OMC Report on G20 Trade and Investment Measures



Further Reading

- You can view the full report by clicking here.