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February 2, 2012
 
Argentina's role in South American poultry production
 
Although this country will become a top five exporter in its own right, Brazil will maintain its pre-eminent position on the continent and overseas.
 
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by Eric J. BROOKS
              
        
 
Within South American poultry, Brazil may lose some market share, yet South America itself will remain the pre-eminent poultry producer. According to a new USDA report, this is partly due to Brazil's growing domestic consumption and Argentina's own improving export position.
 
Brazil's overall position is far from challenged, as its share of South American poultry output jumped from 70% in 2001 to 77% in 2011. Even in 2021, the USDA expects Brazil to still account for 76% of the continent's poultry output. However, despite dethroning the US as world's leading exporter, the past decade saw Brazil's actual share of South American exports slip slightly, from 97% in 2001 to 91% in 2011.

This is not to say that the continent is doing badly, much less Brazil which continues to own nearly half the world poultry export market. Indeed, South American poultry exports jumped 187% over the last decade, far faster than any other part of the world.
 
In fact, the Latin dark horse that quietly stole a little of Brazil's thunder was Argentina. -With ample, Brazil-like feed supplies and lower farm to feed mill transport costs, Argentina's share of South American poultry exports quietly advanced from 1% in 2001 to 6.5% in 2011 and to a projected 11.1% by 2021. In fact, if Argentina does achieve its projected 538,000 tonnes of poultry exports by 2021, it will become the world's fourth-ranked poultry exporter, ahead of China but behind Thailand, the United States and Brazil.
 
Indeed, the gradual export-oriented transformation of Argentina's poultry sector is one of the continent's unsung stories and is poised to continue over the next decade. From less than 10% of production in 2001, 15.1% of Argentina's poultry output was exported in 2011. Exports are projected to total 23% of Argentina's poultry output by 2021.
 
In Brazil, as was the case with its beef sector, much of the impressive output growth is being absorbed by fast rising domestic consumption. This can be seen in the fact that from 2001 to 2011, overall South American poultry consumption increased 67%, but that of Brazil and Argentina jumped by 81% and 71% respectively.
 
Going forward, the USDA expects Brazilian poultry production to rise by another 29.6% by 2021 but for its exports to increase by only 20.5%. By comparison, from 2011 to 2021 Argentina's poultry production and exports are expected to rise by 29.6% and 115.2% respectively.  Even so, that will leave Argentina's exports equaling only 12.7% of Brazil's or some 20% of US exports by 2021.
 
Nonetheless, exports as a share of Brazil's poultry output will drop from 2011's 29.6% to 25% by 2015. With a slower growing population and a slightly lower production cost base, Argentina's poultry exports will partly take up the slack for Brazil's slower export growth, as the latter's domestic demand begins to bite into its world market supplies.
 
At the same time, Argentina's poultry export growth, while impressive, has to be put into a continental perspective. While its projected 538,000 tonnes of exports may put it next to Thailand in 2021's export rankings, they will be outweighed by that year's expected South American poultry imports, which are expected to total 588,000 tonnes.
 
This brings us to an interesting angle in the whole South American poultry story: While the last 10 years have seen the continent take over the world poultry export lead, at 611%, South America's 10-year poultry import growth leaves its export expansion of 187% in the dust. Curiously, much of the poultry imported into South America comes from the United States, which enjoys production costs roughly on par with those of Brazil itself.
 
This is because in the rest of the continent, populations are outstripping feed supplies, making imports of poultry and other meats necessary. In this respect, we can conclude that over the next decade, South America's poultry trade will assume the following structure:
 
Consequently, while South America will supply a majority of the world's poultry exports, Argentina will go from today's 6.5% share of South American exports to 15%, it will take this piece of the export juggernaut from Brazil. However, Argentina should be thought of more as a counterweight: Brazil will continue to dominate foreign poultry sales while Argentina's exports will equal the poultry ' flowing into the rest of the continent.
 


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