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Crisis in Brazilian poultry breeders and slaughterhouses

Soaring prices of corn, soybeans and soybean meal, mixed with a lack of credit, have caused a crisis in Brazil's poultry industry. The problem has hit both integrated breeders, which are in debt and in many cases owed money by producers, and slaughterhouses, which have laid off 5,750 workers in the past three months, reduced output by 10% in July and August, and will soon pass on increased costs to consumers.

These findings have been presented by the president of the Brazilian Poultry Farming Association (Ubabef), Francisco Turra. He says that in the last 60 days the industry has cut production by 200,000 tons of poultry meat in Brazil, and without help from the federal government the situation will deteriorate by the end of the year, leading to a fall in Brazilian production compared with its 13.1 million tons in 2011.

According to Turra, the crisis in the first half of this year was caused by an unexpected drought in the United States, which led to a run on soybeans and corn produced in Brazil. This increased demand led to an increase of up to 90% in the prices of meal since January, to almost R$ 1,400 a ton, and a 58% rise in soybeans, to almost R$ 1,300 a ton. Corn prices have increased by 44%, to nearly R$ 550 a ton, says Turra.

Information provided by Valor Econômico




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