Chicken in Brazil May Get Thinner as Pricey Corn Drives Up Costs

Some chicks in the world’s biggest poultry exporter are getting fed less because of escalating corn prices.

Some of Brazil’s poultry companies are slaughtering less weighty chickens to deal with surging prices for corn, the staple that accounts for most animal feed costs, Ricardo Santin, head of the meat exporter group ABPA, said in an interview. There are cases of some producers cutting back on the number of chicks housed or temporarily halting operations.

“This adjustment is inevitable while corn prices continue at this level,” Santin said, adding that some firms haven’t been hurt by rising costs because they have enough stockpiles bought earlier at lower prices.

The grain prices in Brazil have hit fresh records in the domestic market, soaring more than 60% in the past 12 months. Unlike the U.S., Brazil’s meat industry hasn’t been able to pass on higher costs to consumers given the weakened economy in the South American nation.

Chicken in Brazil May Get Thinner as Pricey Corn Drives Up Costs

While prices are expected to drop in the second half of the year as Brazil harvests a second corn crop, such declines may not mean significant relief for the animal protein industry, according to ItauBBA. The Sao Paulo-based bank projects grain prices will be 30% higher in September than a year earlier.

“We see, though, a better domestic and export market for the year’s second half,” ABPA’s Santin said.

©2021 Bloomberg L.P.

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