Corn, soy prices drive up production costs in Brazil
Country’s poultry, pig producers suffer from rising feed prices
Once again in June, it is the rising costs of key feed ingredients – corn and soybeans – that continue to push up production costs for Brazil’s poultry and pig producers.
In the important poultry-producing state of Paraná, the wholesale price of corn doubled over the past 12-month period, according to Ari Jarbas Sandi, socioeconomics analyst with Brazilian Agricultural Research Corporation (Embrapa). He put the increase in Santa Catarina, where most Brazilian pork is produced, at more than 88 percent.
For soybean meal, he estimates the costs for poultry and pig producers at 37.5 and 38.1 percent higher, respectively, than a year ago.
Recent more favorable market conditions and exchange rate movements have led Sandi to forecast that wholesale price reductions in these key feed ingredients are likely in the coming month.
However, the corn and soy prices helped push up the costs of broiler and swine production again in June, by 3.0 and 7.4 percent, respectively, compared with the previous month.
For broilers, the index (ICPFrango) reached 242.3 points, an increase of almost 19.5 percent so far in 2016, and 34.4 percent over the past 12 months.
The score for pig production costs (ICPSuíno) stood at 253.7 in June – the first time it has exceeded 250. The index has risen by 22.7 percent so far in 2016 and stands 38.8 percent higher than at the same point in 2015.
The indices of production costs were created by socioeconomics team of Embrapa Swine and Poultry and the National Food Supply Agency (Conab) in 2011 at 100 points. 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.