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Challenging Scenario. This Is What The Itaú BBA Bank Sees In Analysis Carried Out For The Market Of Several Products Of Brazilian Agriculture, Among Them Chicken. The Numbers Are Projections For The First Month Of This Year 2023. However, The Analysis Also Warns About Production Costs.
The prediction is that feed will leave margins tight for poultry farmers because it contains grains, and the market, besides being on the rise, faces difficulties in passing costs along the chain. As a result, the expectation is that production growth will occur more slowly, with lower rates compared to 2022. Last year, the chicken market saw activity expand from 2.5% to 3% in the same period, and from 6% to 7% throughout the year, with data analyzed since the second half of 2021. In the first half of January 2023, the same average prices were recorded as at the end of last year, valued at about 10% less on December 30, the last business day of 2022. The trend for the second half of January is that these declines will continue, even with the population returning from vacation and the start of the school year still occurring in January.
There are also no forecasts that Brazilians will eat more meat than they have been consuming since the second half of 2022. Therefore, Itaú BBA recommends poultry farmers who have the capacity to shift towards exportation, as there is favorable external demand. In the first half of February, the Federal Government disclosed information that exports of poultry and by-products exceeded 60% in revenue and volume compared to January 2022 exports.
Moderate Increase
There are no forecasts for an increase in domestic consumption. This is the breakdown of the bank’s analysis, as we have a scenario of uncertainties in the Brazilian economy, with the change in government. Therefore, there is no talk of raising chicken prices at the consumer level as a strategy to increase margins for poultry farmers. This is because it has been a long time since the price of beef forequarters has been so close to the price of chicken. There will be a greater supply of cattle for this year, so poultry protein and beef protein will have to compete more for consumers in 2023.
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A greater margin increase is to be expected starting in the second half, with the arrival of the second corn crop, as there are no hopes that, at the beginning of the year, feed prices will decrease. And the focus should be on exportation, as Itaú BBA’s analysis highlights that, due to avian influenza affecting several countries, including countries in Latin America, the external consumer market is strengthened. The bank also found that, in various competing players such as the European Union, Thailand, and China, there was little response to the production of poultry protein. Thus, the market’s solution will be to seek chicken in Brazil.
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