W33: Chicken Update

In W33 in the chicken landscape, the Brazilian Animal Protein Association (ABPA) expects Brazilian chicken meat production to range from 14.8 million metric tons (mmt) to 14.95 mmt in 2023, a potential increase of up to 3% year-on-year (YoY). ABPA also expects 2024 Brazilian chicken meat production to reach 15.5 mmt, a 4.5% rise compared to the 2023 estimate. ABPA projects 2023 Brazilian chicken meat exports to range from 5.1 mmt to 5.2 mmt, an increase of 8% YoY, while 2024 Brazilian chicken exports are anticipated to reach 5.35 mmt, a growth of 5% compared to the 2023 estimates. ABPA also predicts a per capita consumption increase of up to 1.5% in 2023, reaching 46 kilograms (kgs), followed by a potential increase of 3% to 47 kgs in 2024. Brazilian chicken meat supply in the domestic market is expected to reach 9.85 mmt in 2023, a potential YoY growth of 1.5%, while domestic chicken meat supply is projected to reach 10.15 mmt in 2024, a possible 3% increase from the 2023 estimate.

ABPA expects Brazilian poultry exports to Arab countries and the Halal market to surge in 2023. This projection is attributed to decreased output and exports from Brazil's main competitors, particularly Turkey. Notably, Turkish poultry exports reached 200 thousand metric tons (mt) from Jan-23 to Jun-23, a drop from 297 thousand mt in the same period in 2022. This decline, coupled with reduced exports from Chile, indicates an opportunity for increased Brazilian poultry sales to Arab countries. ABPA highlights the promising performance of the Halal market and predicted significant growth in Iraq and Iran, primarily due to Turkey's absence as a competitor. ABPA reports that Brazilian poultry exports to Iraq reached 98 thousand mt from Jan-23 to Jul-23, a remarkable 218.7% increase compared to the same period in 2022.

The purchasing power of São Paulo's poultry farmers concerning key inputs like corn and soy bran rebounded in early Aug-23 after experiencing a decline in Jul-23. The Center for Advanced Studies on Applied Economics (Cepea) attributes this increase to appreciating live chicken prices. This situation reflects the industry's approach of reducing poultry accommodation to lower the chicken supply and address the meat oversupply in the Brazilian market. The average price of live chicken in São Paulo reached USD 0.97/kg as of August 16, a significant 8.2% month-on-month (MoM) increase. As corn prices decreased and bran prices rose more moderately compared to chicken prices, these combined movements contributed to the improved purchasing power of poultry farmers concerning these inputs.

Lastly, the Japanese government lifted the suspension on the purchase of eggs, chicken meat, and their by-products produced in Santa Catarina in Brazil, effective on August 18. This suspension was imposed on July 17 following an avian flu outbreak in the municipality of Maracajá in Santa Catarina. Japan requires a temporary suspension as a protocol, waiting for a 28-day period when the Japanese authorities conduct analyses before reopening the market. This is despite Brazil's overall freedom from highly pathogenic avian influenza (HPAI) on commercial farms. Brazil is a global leader in chicken exports, accounting for 35% of the global market share. Santa Catarina, Brazil's second-largest producer and exporter of chicken meat, shipped approximately USD 310.8 million worth of exports to Japan.