Brazil's poultry output may drop 4.1. percent by the end of 2012, to 12.3 million metric tons, from 12.9 million metric tons in 2011 due to rising feed costs, according to oilseed industry researcher Oil World. The decline will be the first in 20 years, and is coupled with a drop in exports, from 3.95 million metric tons to 3.91 million metric tons.

“Producers have cut back in response to high feed prices and unattractive margins,” said Oil World. “This is the first year-on-year reduction in 20 years. A slight reduction occurred in exports, but most of the decline is going to occur in the domestic market, reducing average consumption per person.” The country's consumption is expected to drop, as well, to 8.42 million metric tons from 8.92 million metric tons in 2011, with per-capita consumption dropping to 43.41 kilograms from 46.34 kilograms.

Advertisement

The majority of Brazil's poultry meat is produced in the southern part of the country, where the corn harvest at the beginning of the year was significantly reduced by drought, according to Oil World. “Domestic poultry prices increased and were up by about 25 percent from a year earlier in October and early November, but the increase in feed costs was considerably higher,” said Oil World.