The three largest poultry producer in Brazil have said they will reduce production due to high feed costs.
Independently from each other the three largest poultry integrators in Brazil, Marfrig, Brasil Foods and JBS have said this at the recently held meeting of the International Poultry Council in Bahia, Brazil.
The poultry producers have to deal with increased costs, which cannot be recovered from their buyers. Retailers refuse to take the higher prices and pass them on to consumers. For the short term the only thing to do is to reduce production.
Especially the price of grains have skyrocketed and the latest forecasts of the US Department of Agriculture imply a further increase if harvests are lower due to droughts in the US and other regions and poor quality due to surplus rain in some areas of the world.
Also in Europe it is expected that poultry production will shrink, since producers cannot recover the higher costs. German integrators already have announced they will lower production.
Less production means fewer products. With equal demand this should result in higher prices. It has been reported already that fewer baby chicks are hatched.
Some poultry farmers call on their colleagues to take more time between batches and this way reduce production over the rest of the year.
Source: Argentine Beef Packers S.A.
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