WASHINGTON – The US Department of Agriculture Foreign Agricultural Service (FAS) revised its forecast of Brazil's broiler production in 2012 to 3 percent from 5 percent.

Broiler production in Brazil is estimated to be 13,250,000 metric tons in 2012, according to FAS. The latest production estimate was adjusted to reflect views of industry leaders regarding the impact of the European financial crisis and its impact on the Brazilian broiler export markets, the agency said. Other factors prompting the revision include an overvalued Brazilian real, restrictions from trade partners, and a slowdown in the growth rate of domestic consumption combined with higher production costs due to rising corn prices, FAS said.

FAS also revised downward to 3 percent its outlook for 2012 broiler exports. Higher sales of whole broilers and chicken parts to China and Hong Kong are likely growth drivers for exports, and Egypt and Iraq are expected to be higher, FAS said.

Major issues affecting Brazil's outlook for broilers are:

  • The continued overvaluation of the Brazilian currency, although this factor did not prevent record exports in 2011.
  • Uncertainties derived from the world financial crisis, mostly in Europe, and its impact on importing markets.
  • Specific issues with major trading partners such as the Russian Federation (slow re-listing of Brazilian poultry plants) and South African (application of anti-dumping tariffs on Brazilian broilers).