June 17, 2011

Top Brazilian poultry state will slice production

Brazil's major poultry producing state, Santa Caterina, is seen to cut its production because of falling prices coupled with weak local demand of poultry products.

A decrease in production of 5-8% is being predicted, as increases in the cost of feed  are also contributing to producers woes. The cost of corn, the main feed for birds in Brazil, has increased by up to 60% since last year. The state of Santa Caterina, is the only one of the three leading chicken meat producing and exporting states in Brazil that is not self-sufficient in corn.

Cuts are expected more broadly in the Brazilian poultry sector as the year continues and the domestic economy slows. Overall, 2.6% more chicken will be produced this year compared to last year but due to falling meat prices, earnings will be similar to 2010.

Meanwhile, Brazilian co-operative Aurora Alimentos has pulled the plug on plans to build a massive poultry complex in the southern state of Rio Grande do Sul.

Alimentos said the decision was driven by a "combination of institutional and macroeconomic factors'' - including the decision of three smaller local co-operatives to leave the Aurora camp.