According to USDA-FAS Report BR2022-0032, released on May 10th, producers in Brazil will increase output by 3.5 percent compared to 2021 to 14.85 million metric tons (32,670 million lbs). Expansion is driven by both domestic demand and exports that will represent 30.9 percent of production attaining 4.6 million metric tons (10,120 million lbs).
Assuming a population of 215 million, per capita consumption will be 47.7 kg (105 lbs). Chicken is now the principal protein consumed in the nation representing 50 percent of all meat followed by beef at 35 percent and pork at 15.
The volume of production and profitability of chicken sector in Brazil is influenced by the state of the economy. Inflation will persist at over eight percent during 2022, but with an 11 percent unemployment rate.
Producers in Brazil offer a wide portfolio of products to suit the markets that they supply. For 2021, China represented 14.8 percent of exports totalling 4.06 million metric tons. China has approved 47 plants in Brazil with 80 percent of these concentrated in the top five producing states including Parana, Santa Catarina, and Rio Grande do Sul. Current export data suggests that China will continue purchasing specific chicken products from Brazil comprising 145,000 metric tons during the first quarter of 2022.
Japan is the second largest market for Brazil with 10 percent of export volume. The United Arab Emirates is third at nine percent, followed by Saudi Arabia at eight percent. Saudi Arabia has imposed strict Halal requirements that impacted exports in 2021. The Middle East market demands local production resulting in the major producers in Brazil establishing joint ventures with domestic companies to produce and process chicken locally. Brazil supplies a wide range of importers including South Africa, the Philippines, South Korea, and the Russian Federation. It is significant that Mexico received 2.4 percent of exports from Brazil in 2021 with every prospect of expansion as import duties from non-USMCA nations have been waived for a year effective June 2022. Producers in Brazil are experiencing the same inflationary pressures as in the U.S. and in 2022 will be impacted by drought increasing the cost of both corn and soybeans. Feed represented 76 percent of live bird cost during March 2022 followed by day old chicks at 13 percent, labor at 3 percent, and the remainder comprising various fixed and variable costs.
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Brazil will continue as the world’s leading exporter of chicken and will be able to leverage its advantages in the form of a diverse product range, relatively low cost of production, freedom from avian influenza, and active promotion with well established distribution through joint ventures and agents.