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Brazil Poultry Output Seen Lower by Oil World in 20-Year First

Nov. 27 (Bloomberg) -- Brazil’s poultry output is expected to decline for the first time in 20 years as chicken farmers curb production in response to rising feed costs, oilseed industry researcher Oil World said.

Poultry meat output may fall 4.1 percent to 12.3 million metric tons this year from 12.9 million tons in 2011, Hamburg-based Oil World wrote in a report today. Brazil’s exports of poultry, the world’s biggest, may slip to 3.91 million tons from 3.95 million tons.

Brazil’s poultry production almost doubled in the past decade and now ranks behind the U.S. and China, while the country’s exports more than tripled. Brazil produced 37.8 million tons of poultry feed last year, of which 25 percent was soy meal and 61 percent corn, Oil World said.

“Producers have cut back in response to high feed prices and unattractive margins,” Oil World said. “This is the first year-on-year reduction in 20 years. A slight reduction occurred in exports, but most of the decline is going to occur in the domestic market, reducing average consumption per person.”

Brazil’s poultry consumption is predicted to slip to 8.42 million tons from 8.92 million tons last year, with per-capita consumption falling to 43.41 kilograms (95.7 pounds) from 46.34 kilograms, Oil World said.

Most of Brazil’s poultry meat is produced in the southern states, where the corn harvest at the start of the year was “sharply” reduced by drought, according to Oil World.

“Domestic poultry prices increased and were up by about 25 percent from a year earlier in October and early November, but the increase in feed costs was considerably higher,” the researcher wrote.

To contact the reporter on this story: Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net

To contact the editor responsible for this story: John Deane at jdeane3@bloomberg.net

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