Brazil’s Animal Protein Industry Follows Grain Production

Brazil’s potential for expanding its animal protein industry is unmatched. Brazil is set to remain a major player because of its ability to increase production. Much of the new production will occur inland as a result of the increasing availability of competitively priced corn and soybeans. These crops are effectively trapped in the Brazilian Midwest due to underdeveloped export infrastructure.

photo of broiler chicken

By 2023, each year an additional 41 million tonnes of poultry and pork, along with almost 9 million tonnes of beef, will be consumed in the world each year, according to the Organisation for Economic Co-operation and Development (OECD) and the Food and Agriculture Organization of the United Nations (FAO). Brazil, the global market leader in the beef and poultry trade, is well-placed to step up as one of the biggest contributors to this expected growth. 

There is a shift to cheaper grain areas

Brazil’s pork and poultry industries can further shape their global competitiveness (cost and value) positions by following grain production expansion to inland production areas. Therefore, pork and poultry companies are expected to accelerate the trend started in the early 2000s- more aggressively pursuing opportunities to boost operations near areas where cheap feedstuff is becoming increasingly plentiful.

Rabobank estimates an approximate 30 percent price advantage in feed costs can be achieved in inland areas of Brazil, compared to the traditional areas in the South. To put it in perspective: total savings for the grower could be translated into a 15 percent cost advantage for live poultry and 14 percent for live pork, on a live weight basis.

Why focus on the big players?

While a considerable amount of investment will be required to make it all possible, it is achievable. The opportunities are promising, particularly for those who are willing to assume that taking up the opportunity of expansion in the Midwest will improve the overall competitive position of Brazil in the world. The cost of production can be brought down, while volumes can still expand significantly. And producers, industries and investors can make it happen.

Where to go from here