Brazil’s Heightened Poultry Meat Production Leads to Record Exports Despite Diminishing Prices

Frozen Whole Chicken
Published Jan 29, 2024
Brazil is poised for a 1% YoY increase in poultry meat production in 2024, reaching an estimated 15.05 mmt, propelled by low production costs and strong global demand. Simultaneously, the country's poultry meat exports are forecasted to expand by 2% YoY in 2024, reaching approximately 4.9 mmt. Despite a decrease in export prices in 2023 attributed to heightened supply, the shipment rates are expected to remain stable, aligning with the five-year average throughout 2024. This optimistic outlook reflects Brazil's resilience in the face of market dynamics, signaling continued growth and stability in its pivotal poultry sector.

Brazil is a major player in the global poultry industry, securing its position as the second-largest producer globally, trailing only the United States (US), and claiming the top spot as the leading exporter of poultry products. According to the United States Department of Agriculture (USDA), Brazilian poultry production is estimated at 14.9 million metric tons (mmt) in 2023, a 2.97% uptick from the 14.47 mmt recorded in 2022. Projections indicate a further 1% year-on-year (YoY) increase in 2024, reaching around 15.05 mmt. Low production costs and robust global demand underpin these positive forecasts.

Figure 1: Brazil’s Poultry Meat Production from 2014 to 2024

Source: USDA

The Poultry and Swine Intelligence Center (CIAS) reveals that the close of 2023 saw the production cost per kilogram (kg) of live broilers in Brazil reaching USD 0.89 (BRL 4.41). Despite the Broiler Chicken Production Cost (ICP Frango) index experiencing highs since Oct-23, the production costs of broilers dropped by 20.33% in 2023. Notably, the adjustment in technical coefficients implemented in Jan-23 contributed to a 7.1% reduction in the ICP Frango index, with prices accounting for the remaining accumulated variation throughout the year. These figures underscore that the anticipated record poultry output for 2023 is attributed to the decreased production costs that incentivized producers. Even with reduced chicken meat prices in the domestic market during 2023, Brazilian producers continued to maintain profitability, leveraging their low production costs.

According to the latest data from the Ministry of Development, Industry, Trade, and Services, Brazil's poultry meat exports under HS Code 0207 reached a record 4.8 mmt, valued at USD 8.97 billion. This signifies a notable 8.13% YoY uptick in volume and a slight 0.9% YoY increase in value. The primary destinations for Brazilian poultry shipments in 2023 included China, constituting approximately 15% of the market share, trailed by the United Arab Emirates (UAE), Japan, Saudi Arabia, and South Africa.

Figure 2: Brazil’s Poultry Meat Exports

Source: Brazil’s Ministry of Development, Industry, Trade, and Services

The uptick in Brazilian poultry shipments in 2023 was fueled by a surge in global demand, particularly led by China. This increase in external demand is linked to evolving consumer preferences in various countries, with many opting for poultry over beef. This shift is notably in response to the comparatively more affordable poultry quotations, particularly in the prevailing landscape of generally high prices. Additionally, many consumers are shifting towards healthier dietary choices, considering chicken as a preferred protein alternative.

Despite the notable increase in shipment volume, Brazilian poultry meat prices per ton declined in 2023. In Dec-23, Brazilian poultry meat exports reached 435.3 thousand metric tons (mt), valued at USD 748.4 million. This marked a significant 22.17% month-on-month (MoM) surge in volume and a remarkable 18.42% MoM rise in value. However, the price per mt averaged USD 1,719.3 during the period, a 3.07% decrease compared to the USD 1,773.8 recorded in Nov-23 and the lowest price since Jan-22. It is noteworthy that while the export prices in 2023 were notably below the levels seen in 2022, they remained elevated compared to the five-year average. This suggests that 2022 was an abnormal year due to global supply chain disruptions, such as the Russia-Ukraine conflict.

Figure 3: Brazil’s Poultry Meat Export Price Trend

Source: Brazil’s Ministry of Development, Industry, Trade, and Services

With a projected rise in poultry meat production in Brazil, exports are anticipated to reach approximately 4.9 mmt in 2024, a 2% YoY increase. According to the Secretariat of Foreign Trade (SECEX), Brazil’s poultry meat exports reached 170.53 thousand mt in the first nine working days of 2024, averaging 18.95 thousand mt per day. If this export pace is sustained, Jan-24 shipments could total around 416.9 thousand mt, a 7.4% increase compared to Jan-23 but a 13% decrease compared to Dec-23. Export prices are expected to remain relatively stable in 2024, aligning with the five-year average.

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