Horizon
For the first half of 2017, Ricardo Santin, fromABPA, believes that corn prices will bemore ad-
justed to the sector’s reality. He understands that there will be sufficient supply from the domestic
crop and reflections from imports coming from other countries, like Argentina, Paraguay and the
United States, which should regulate the values in real and prevent the sectoral supply chain from
collapsing. “In 2016, the producers did fail to capture advantages, because the corn market was
under speculation”, he says.
With bigger corn supplies, at adjusted prices, there will be smaller pressure from costs. “And
there is also the expectation of a dollar close to R$ 2.40 or R$ 2.50, which is the breakeven point
for the sector to export with profit margins”, he says. In Santin’s view, the production and markets
of chicken, turkey, eggs and aviculture genetics will continue on an uptrend all over the world, and
evenmoreinBrazil.WhatisperfectfortheCountry,biggestglobalexporterandsecond-largestpro-
ducer, where birds are the biggest protein market. “With the economy back on track we hope that
domestic consumptionwill soar from500 grams to one kilo,” he anticipates.
In spite of the rising
production costs
and smaller national
supplies of corn, the
productionof chicken
meat and eggs have
continuedon the rise
in the Country
Indulging in
imagination
If 2015 was not easy for the poultry
supply chain, what about 2016, season in
which, besides the economic and political
crisis, Brazil faced corn supply difficulties,
the leading raw material of the sector; de-
preciation of the dollar, global crisis and
shortage of credit lines? At a first analysis,
everything pointed to a weak year. How-
ever, in spite of everything, the season will
come to a close in a comfortable situation.
This happens because, once more, the
poultry supply chain managed to surmount
its obstacles, thanks to the performance of
consumption, reduction of the margins and
tighter competition with other proteins.
According to Ricardo Santin, vice-presi-
dent of the Market Department at the Bra-
zilian Association of Animal Protein (ABPA),
it was an atypical year, with a serious crisis
in corn supply. In the first half of the year,
the sack of corn jumped from R$ 25 to up-
wards of R$ 60. Feed accounts for 60% of
the production cost. “Furthermore, in Bra-
zil, the dollar dropped from R$ 4 to R$ 3.20
very rapidly and, in the meantime, prices in
dollars equally went down, causing difficul-
ties to exporters”, he explains.
Another pillar of the sector’s problems
in 2016 was brought about by the politi-
cal turmoil, which multiplied the econom-
ic crisis in the Country, diminishing the pur-
chasing power of the consumers and, at the
same time, preventing the companies from
passing production costs on to the final
consumers. Consumption should remain
stable at 43 to 44 kilograms of broiler per
person a year in Brazil, thanks to the rela-
tionship with other proteins. In 2016, for
the second year in a row, chicken will be
most consumed meat in Brazil.
ABDA executive president Francisco
Turra, recalls that most investments were
extremely limited, throughout the supply
chain. The banks set credit limits, by vol-
ume, by higher interest rates, through the
requirement of real sureties or through bu-
reaucracy.
Inor Ag. Assmann
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