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on June 28, 2016

Broiler, pig production costs rise in Brazil

Rising feed prices contribute to increased costs

According to the Central Intelligence Poultry and Swine (CIAS) with the Brazilian Agricultural Research Corp. (Embrapa), the costs of broiler and swine production increased again in May, by 6.2 percent and 5.4 percent, respectively, compared with the previous month.

For broilers, the index (ICPFrango) reached 235.3 points, compared with the base index of 100 points in January 2010. This represents an increase of almost 16.6 percent so far in 2016, and of 32.6 percent over the past 12 months.

Compared with the base index of 100 in January 2007, the score for pig production costs (ICPSuíno) stood at 236.3 in May, which is a record. The index has risen by 15.3 percent so far in 2016 and stands 32.4 percent higher than at the same point in 2015.

As in recent months, the latest increases in production costs have been attributed mainly to continued rising prices of corn and soybeans, which make up most of the feed for poultry and pigs in Brazil.

Total cost of production for chicken in May was BRL3.04 (US92 cents) per kilo, compared with BRL2.64 (US80 cents) for the past 12 months. Of the total for the month of May, feed costs (corn, soybean meal, micronutrients, soybean oil, dicalcium phosphate, salt and limestone) accounted for 73.1 percent. One year ago, the figure was 69 percent.

In May 2016, the average cost of production of swine in Brazil was BRL4.13 (US$1.25) per kilo, of which, feed accounted for 79.1 percent. A year ago, feed made up 76.9 percent of the total cost of BRL3.59 (US$1.08).

The indices of production costs were created in 2011 by socioeconomics team of Embrapa Swine and Poultry and the National Food Supply Agency (Conab). The ICPFrango score represents typical broiler production costs for a ventilated poultry shed in the state of Paraná, while ICPSuíno is based on a typical “full cycle” pig production system in the state of Santa Catarina.

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