Weekly Product Updates

W30: Chicken Update

Frozen Whole Chicken
Published Aug 4, 2023

In W30 in the chicken landscape, Rabobank highlights a positive outlook for the global poultry sector in Q3-23, with reduced food prices contributing to stronger growth. Decreasing feed costs, relative supply scarcity in some regions, and increased prices for competing meats have improved poultry's competitiveness. The decline in input costs is partly due to the relative supply scarcity in Europe, Mexico, Russia, the Philippines, and Malaysia. Rabobank forecasts that feed prices will continue with a downward trend in the second half of 2023, standing 10 to 15% below the 2022 all-time highs, contributing to reduced costs. Additionally, increased world trade, with some countries opening their markets, benefits poultry exports.

The United States Department of Agriculture (USDA) expects global chicken meat production at 103.5 million metric tons (mmt) in 2023. The USDA indicates that Brazil, the European Union (EU), and China have been able to maintain relatively stable production levels. This is due to improved feed prices and the absence of major outbreaks of highly pathogenic avian influenza. The USDA predicts a slight but sustained increase of less than 1% in chicken meat exports in 2023 compared to the April projection, reaching 13.8 mmt. Brazil leads this growth with a 2% increase in shipments, benefiting from an absence of avian influenza, competitive prices, and a diverse range of products satisfying global market demands.

Brazilian fresh chicken meat exports in Jun-23 closed at USD 1,986.82/metric ton (mt), nearly 11% lower than USD 2,223.03/mt in Jul-22. Despite the drop, the current value remains higher than during the first two and a half years of the COVID-19 pandemic. The pandemic caused extreme price fluctuations, with Jun-20 seeing record lows not seen in almost 15 years. Two years later, prices reached a historical peak, showing an amplitude of 57% between maximum and minimum. Comparing the first semester of 2023 to the same period in 2020, there is an appreciation of just over 30% in the United States (US) dollar and over 35% in the Brazilian real, which exceeds the National Consumer Price Index (IPCA) inflation of just over 25%. Corn, the main raw material for chicken, increased by 43% in Brazilian real and nearly 37% in US dollars during the same period.

Lastly, chicken meat exports from Paraná state in Brazil during the first half of 2023 reached a record of approximately 1.07 mmt. This is a 12% increase compared to 956 thousand mt in 2022, maintaining its lead in chicken meat exports. Paraná accounted for 41% of all Brazilian chicken meat transactions in the global market. This is the first time Paraná surpassed the 1 mmt mark exported in the first six months of a year, the best performance since 1997. This achievement marks the fifth consecutive year of growth in chicken meat exports between January and June. Paraná's chicken exports almost doubled the second-place state, Santa Catarina, which registered 545.5 thousand mt (+7.44%), while Rio Grande do Sul ranked third with 372.7 thousand mt (-1.9% drop). Other major chicken meat exporters included São Paulo, with 151.4 thousand mt (+17%), and Goiás, with 120.4 thousand mt (+30.8%). The total chicken meat export value reached USD 1.94 billion, significantly higher than the USD 203.52 million traded 20 years ago in the same period.

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