Brazil: Chicken meat remains more competitive than other proteins

Even with a large supply of beef in the market, the consumption pattern of the Brazilian population shows little change for a very simple reason: chicken meat prices fell in the first quarter, maintaining the best cost-benefit ratio for the final consumer. Pork has also been proving competitive at this time, with subsequent price lows.

Both pig and chicken industries suffer from the same problem, excess supply. Even in an environment marked by a strong pace of exports, the domestic market still has symptoms of oversupply. Fortunately for these segments, there is also a decline in costs, especially those related to animal nutrition, considering the recent decline in corn and soymeal prices.

Unlike what happens with beef, pork and chicken exports, in particular, are doing very well in 2023. Chicken meat set a historic record in March, when more than 500 thousand tons were exported. The performance of pork is also very positive, both in terms of volume and revenue. Even so, the volume exported is not enough to drain the domestic market, resulting in a decline in the prices of wholesale meat and live chicken/pig.

Faced with a scenario of falling costs, it seems unlikely that the two sectors will make adjustments in supply, maintaining a dichotomous situation, in which exports present a spectacular performance while the domestic market presents a dismal performance. The described environment tends to widen the gap of income formation between exporting and non-exporting industries.

In comparison, chicken meat remains more competitive, as the graph below shows precisely, using data collected in the São Paulo market. The partial average of frozen chicken in April is BRL 6.50. In turn, pork carcass has a partial average of BRL 9.90 per kilogram. While beef hindquarter has an average of BRL 20.19 per kilogram. Beef forequarter has an average price of 14.32. That is, frozen chicken is approximately 3.1 times more affordable than beef hindquarter cuts. Around 2.2 times more affordable than front beef cuts and nearly 1.5 times more affordable than pork carcass.

In view of the increased supply of animal protein in the Brazilian market in 2023, it seems safe to say that the meat industry will not be a villain in inflationary indices, unlike what was seen in previous years. On the other hand, it seems quite clear that the Brazilian agroindustry will prioritize exports even with a less attractive exchange rate. The difference in revenue formation is striking, and this is valid for all proteins of animal origin exported by the country.

Tags: exports, pork, Brazil, prices, Beef, Market, chicken meat, pig, supply