Brazil's broiler production is estimated to grow by 3 percent in 2012, according to the U.S. Department of Agriculture Foreign Agricultural Service's latest report.

This number is revised down from an initial forecast of 5 percent growth. Production estimated at 13.3 million metric tons, reflecting the current view of industry leaders given the world economic uncertainties derived from the European Union financial crisis and its impact on Brazilian broiler export markets. In addition, production growth has slowed due to an overvalued Brazilian currency and restrictions from trade partners.


Another important factor is a slowdown in the rate of growth of domestic consumption combined with higher costs of production due to higher corn prices, according to the report. Total 2011 broiler production was revised to 12.8 million metric tons, 4.5 percent higher than 2010, to show new data obtained from the industry.

Brazil's domestic consumption of broiler meat in 2012 is projected to increase by 3 percent to 9.9 million metric tons, which is below the initial forecast of 10.1 million metric tons. This estimate reflects continuing increases in disposable income of Brazilian consumers, according to the report. Broiler meat still remains the most affordable to lower-income consumers compared to beef and pork. However, high debt-to-income ratios among Brazilian consumers have been reported as a growing concern among trade contacts. This situation could inhibit further increases in consumption.