USDA released its projections on the meat industry in 2023 on the 12th. It is clear that Brazil will continue to advance in the global market in terms of exports, easily maintaining its leadership. Some points of the report draw attention:
US production continues to advance in 2023, exceeding 21 mln tons, compared to 20.8 mln tons that must be produced this year. The numbers draw attention in the face of another outbreak of Avian Influenza that keeps causing damage to commercial farms in the United States. The fact is that the US market is robust, and an overwhelming part of this production is destined to supply it. Exports even advance, according to the USDA estimates, reaching 3.35 mln tons, compared to 3.27 mln tons that must be exported in 2022, but the focus is really on meeting domestic consumption;
USDA points to important advances in Ukrainian chicken exports, which seems unlikely in a scenario of war that has been prolonged and without symptoms of regression. It seems premature to imagine that a war-torn country that is in serious danger of losing its port areas will have the capacity to export 450 thousand tons of chicken in 2023;
The Department also points to production growth in the European Union, despite the lack of control of Avian Influenza in this continent and the proximity of winter. The potential gas supply crisis on the European continent can produce losses in commercial farms, since temperature control is extremely relevant in chicken production. The region must produce around 10.97 mln tons of chicken in 2023, a slight increase from the current year, when around 10.92 mln tons must be produced;
China must maintain the 2022 numbers, producing around 14.3 mln tons next year. In this context, it should be mentioned that Avian Influenza is also present in Asia, impacting local production.
Despite the relatively optimistic numbers from USDA, the global scenario for chicken production remains troublesome, with a series of mishaps to be considered. The fact is that Brazil continues to find good space to advance in the global market, maintaining the leadership of exports, emerging as a great alternative for the supply of this protein. According to a projection by SAFRAS & Mercado, the country must export around 4.81 mln tons, compared to the volume of 4.74 mln tons that must be exported in 2022.
For production, the estimate of SAFRAS & Mercado points to a volume of 14.5 mln tons, compared to the production of 14.37 mln tons registered in 2022. The recovery of the herd of matrices over the year will allow more consistent production advances in 2023. However, there is an alert regarding the costs of animal nutrition during the first semester, with the perspective of still sharp prices for corn in the period.
The great advantage of chicken farming over other activities in the meat industry lies in its unique ability to adapt more efficiently to the challenges that the market presents, be it demand problems or even occasional years in which the cost structure is inflated. Therefore, downward corrections in production may occur next year due to costs and, more relevant than that, the increase in the beef supply in the domestic market, which will have an impact on the price formation of competing proteins.
In this market design projected by SAFRAS & Mercado, there will be an increase in domestic availability, with an indication of 9.7 mln tons, against 9.6 mln tons offered in the current year, up 1%.
The increase in the supply of animal protein in Brazil offers two distinct perspectives, the first is that there will be a need for a strong domestic market, that is, advances in the level of employment and the average income of the population will be necessary for a new balance point to be reached by the sector. The second aspect is that the competitiveness of exports is sustained, with Brazil in a prominent position in the global market, with the dollar still operating at least at BRL 5, it is safe to say that Brazilian agribusiness will continue to focus on exports.