Between January and April this year, Brazilian demand for broiler feed fell by 9 percent in comparison to the same period last year. This contraction was largely the result of declining chick placements. In October last year, chick placements stood at 496 million head, but by February, the figure had fallen to 406 million head.

So where does this contraction leave the Brazilian poultry and feed industries? Does it signify the start of a decline, or at best, stagnation, in a sector that has witnessed spectacular growth over recent years, or is this simply a temporary blip? Despite production of chicken meat during the first four months of the year falling by 13% in comparison with the previous four months, the latter, is almost certainly the case.

The first four months of 2009 saw demand for feed in Brazil contract by 5.9 percent in comparison with the same period of 2008. In comparison with the last four months of 2008, the situation was even worse, reports feed association Sindiraceos, demand was some 15 percent lower.

But this contraction should not be taken in isolation and, in some respects, is to be, in part, expected.

The feed market is seasonal, with the January-April period being the weakest of the year. On top of this, Brazil, like any other country, is suffering as a result of the global financial crisis. While faring better than many - during the first quarter, Brazil’s GDP contracted by only 0.8 percent - the same cannot always be said for some of its trading partners.

What has raised concern, however, is that the contraction in poultry feed production has been greater than that for feed output as a whole. Difficulties in the sector have been headline grabbing, with reports of producers halting production due to a lack of credit and farmers running out of supplies to feed their birds leading to thousands dying.

The full report can be seen in Poultry International's September digital edition.