Porto Alegre, December 13, 2023 – As we know, the challenges for chicken farming at the beginning of next year are several, ranging from issues involving Avian Influenza to rising costs amid the uncertainties related to grain production in Brazil. There are two undisputed facts in this environment:
– Brazil will continue as a global export leader. Despite some setbacks, Brazil remains more competitive than other major exporters, maintaining a significant share of
the global market. The expectation is that close to 5 mln tons will be shipped again over the year;
– Given the challenging scenario, maintaining the housing of breeder chicks at a reduced level is essential to preserve margins. Production flexibility is the great weapon of chicken farming compared to competing proteins, which face longer production cycles. Chicken farming has an excellent ability to adapt its production depending on market contingencies, such as rising costs, market problems, or even health problems.
Given the challenging scenario for the first semester in terms of corn supply, there will naturally be a reduction in housing during this period. For the second half of the year, the numbers should be higher with the entry of the second crop of Brazilian corn in the market and a potential decline in prices, thus offering good margin gain prospects.
In this environment, it seems logical that sectoral margins could be tightened during the first half of the year, but without experiencing major shocks. The problem would be more serious in the event of a lack of production control. Domestic demand remains responsive, especially because most of the population has a low per capita income and depends on proteins with lower added value.
The possible weakening of the real next year is another important variable, expanding the capacity of Brazilian commodities on the international market, making exports more interesting. Brazil continues to search for new markets for its meat sector, with excellent possibilities next year.
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