December 5, 2013
As it tries to cut costs, Brazil's BRF SA, the world's largest chicken exporter, expects stable grain prices in 2014.
Feed produced from grains accounts for between 75% and 80% of costs for poultry producers. Brazil's 2011-12 crops were hurt by drought as well as the 2012-13 crops in the US, and the scarcity of feed caused BRF to raise product prices by 10% between July and December of 2012.
BRF Chief Financial Officer Leopoldo Saboya said the scenario would be different next year as Brazil harvested record soy and corn crops earlier in 2013.
The company, which also makes processed foods, plans to reduce its portfolio of 4,000 products by some 20% as part of its on-going cost-cutting.
"The expectation is to increase revenue even with this reduction," said Sergio Fonseca, president of BRF in Brazil.
The changes are part of a new strategy under Chairman Abilio Diniz and Chief Executive Claudio Galeazzi, who took the reins at BRF earlier this year and have focused on enhancing its international presence.