Brazil's poultry meat production dropped 10 percent below the industry's average monthly output of 1.1 million metric tons in July, due to an increase in the cost of grains which account for 60 percent of poultry producers' expenses, according to Brazilian poultry association Ubabef.

Twenty of the association's 80 members, who range from small producers to large international exporters, are in financial difficulties because of the cost of feed, said Francisco Turra, head of Ubabef. "It's a crisis of the most serious kind in a sector that already works to very tight margins," he said. Prices members are paying for soy have risen 80 percent in the last six months, and 40 percent for corn.


Brasil Foods, JBS and Marfrig have all said they will raise their prices due to the higher cost of inputs. Fitch Ratings downgraded its outlook on all three companies on Aug 17.