Weaker growth on the domestic market is predicted by industry forecasts for 2011, but a 4% to 5% increase in exports is still expected – although the increasing cost of feed and a slowdown in economic growth in Brazil make it unlikely any records set by the poultry industry in 2010 will be broken in 2011, the report stated.
In 2010, approximately 12.3 million tons of chicken were produced, 1.3 million tons or almost 11% more than in 2009. Although exports of all products--whole birds, cuts, salted cuts and processed products – increased by more than 5% to total about 3.8 million tons in 2010, domestic consumption jumped by a massive 14% to reach 8.4 million tons. This is equivalent to 44 kilograms (97.0 pounds) per capita, a 4 kilogram (88 pounds) increase on 2009 per capita consumption.
This year the Brazilian economy is expected to grow by no more than 5%, compared with growth of almost 8% in 2010.
Brazil’s real is expected to lose some ground against other currencies, compared with last year’s 4% gain against the dollar and some other currencies. This would mean higher import prices but would make exports somewhat more competitive and thus more attractive to the industry as the year progresses. Beef prices, the strength of which have been helping boost demand for chicken as an alternative, are expected to remain well above average for most of this year, because of supply shortages.
Feed prices have increased 20% to 30% in the past few months. With 29 million tons of feed consumed by the poultry meat industry in 2010, this situation is likely to have a detrimental effect. Despite this, strong 2010Q4 chick placements indicate that the industry remains optimistic about export prospects.
More than 12 billion chicks were placed during 2010, 9% more than in 2009, and the monthly number has risen steadily to average 525 million in each of the last three months of the year. Exports of poultry meat earned the industry $6.8 billion (€5.2bn) during the year, 18% more than in 2009, while industry earnings as a whole are estimated to have been 9% above those of the previous year. Two-thirds of the chicken meat sold in Brazil is now in the form of high-value processed products, with only one-third sold as cuts or whole birds, the report concluded.