Porto Alegre, July 24th, 2024 – Brazilian chicken farming suffered a major setback last week. An outbreak of Newcastle disease resulted in a self-embargo on chicken meat exports, which is particularly worrying in the case of China, which has stopped buying chicken meat from Brazil on a national scale.
Before going into the consequences of the embargo, it is important to make clear the events that preceded this situation:
– On July 17, the federal government confirmed an outbreak of Newcastle disease in a commercial bird in Anta Gorda, a town in the interior of Rio Grande do Sul. This is the first outbreak of the disease since 2006;
– The problem was caused by a breach created by the tragedy that struck Rio Grande do Sul. Typically, farms are sterile environments, but extreme weather conditions caused many farms to be exposed, creating vulnerabilities. The Newcastle focus emerged on one of these farms;
– For safety reasons, Brazil chose to preventively suspend its chicken meat exports. This happened in accordance with the agreements established between Brazil and its commercial partners, which may be a national or state suspension (the vast majority of suspensions were in this sphere, prohibiting the sale of chicken meat from Rio Grande do Sul) or by range of action.
In the case of China, the suspension generates apprehension for the sector, since the country accounts for 14% of chicken purchases in Brazil, with a monthly average of 45 thousand tons and a monthly revenue of USD 100 mln. Each day of suspension represents an immense loss for the sector.
The other countries that had the purchase of chicken products from Rio Grande do Sul suspended are a minor problem for the country. Of course, there will be losses for Rio Grande do Sul, but Paraná and Santa Catarina can compensate for the absence of the third main chicken exporter among Brazilian states.
It is important to highlight that Brazil strictly followed the health protocol to which it submitted itself at OMSA, with great transparency and efficiency in investigating the facts. It is also important to mention that under normal conditions Brazil would not have outbreaks of the disease on commercial farms. The country is still a reference in biosecurity.
With all the points of this outbreak of the disease elucidated, it remains for Brazil to accelerate its diplomacy to restore the normal trade flow, maintaining a strong pace of chicken meat shipments this season. In cases of prolonged delay in reversing the situation, it would be possible to increase domestic supply, damaging the balance between supply and demand, and causing a decline in prices. In any case, chicken farming can always make production adjustments by lowering housing to adapt to a new demand reality.
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