Where Broiler Production is Heading in Brazil
Antônio Mário Penz Junior
Daniel Gonçalves Bruno
Cargill Animal Nutrition
Introduction
The advances of the Brazilian poultry industry during the last four decades
launched the country to a lead world position. Currently, Brazil is the third and
seventh larger broiler meat and egg producer, respectively. Also, the country had
been the larger world broiler meat exporter since 2004. This strong development
came in line with the animal nutrition industry. The objective of the current text is
reviewing the main factors that led Brazilian poultry industry to a such position, to
evaluate some tendencies for the upcoming years and also to discuss the main
challenges for the future.
History of Brazilian Poultry Industry
The begging of industrial poultry production in Brazil can be traced back to the
1950 decade. During that period, an agreement was signed with the US (Project
ETA 42), when a commission brought pure breeds of poultry with the objective to
promote genetic improvement (Patrício, 2011). It was observed in the states of São
Paulo, Rio de Janeiro and Minas Gerais the first attempts to improve the activity by
means of technological development (Dambrós Junior, 2010). Integration, a model
largely used in the country, was first observed in the southern state of Santa
Catarina, during early 1960’s, stimulated by a large availability of credit for long
term investments, associated with technical assistance provided by the integration
system (Dambrós Junior, 2010; Patrício, 2011).
The consolidation of Brazilian poultry industry started during the 1980’s, when a
huge increase in exported broiler meat volume coupled with the beginning of cuts
exports to Japan (Patrício, 2011), despite the negative influence of internal
economic stagnation on domestic consumption and, consequently, to the
performance of the industry. During the 1990’s, more changes came to the industry
(mainly the broiler meat) to higher technical and productive levels. Consequently,
the competitiveness of the industry increased, with an increase of the efficiency
and the use of new technologies and the reduction of the cost of production. Those
transformations observed during the 90’s were driven mainly by the economic
opening, stabilization of inflation and increase in the income of the population.
Also, it was observed a process of internationalization and acquisition of
companies mainly in south of Brazil (Dambrós Junior, 2010; Patrício, 2011). During
late 1990’s, Brazil started to export processed chicken products to Europe, giving
special attention to characteristics related to performance and meat yield (Mior,
2005).
Current situation of Brazilian poultry production
Brazilian poultry industry currently provides jobs for more than 4.5 million
people and is associated to 1.5% of the gross domestic product (GDP). Currently,
the country is the third largest world broiler producer, very close to the second one
(China). In 2010 Brazil produced 12.23 million tons of broiler meat, whereas China
and USA (lead world producer) were responsible for 12.55 and 16.563 million tons,
respectively (UBABEF, 2012). Furthermore, an expressive egg production was
observed at the same time. According to Mendes (2010), Brazil is the seventh
largest world egg producer. In 2011, 2.7 billion dozens were produced in the
country, with 4.3% increase in relation to the previous year (IBGE, 2012). As the
the largest broiler meat exporter (Figure 1), in 2010 Brazil exported more than 3.8
million tons, to 150 countries. Despite this expressive number, only 31% of the
production was exported, whereas domestic consumption accounted for 69% of
the total production.
Figure 1. World broiler meat exports in 2010 (Source: UBABEF (2012)
In line with the massive quantitative increase observed in the production of
Brazilian poultry industry, its efficiency had improved significantly, too. From 1990
to 2009, Patrício (2011) analyzed production data of broiler companies from all
over the country (in total 4.6 billion birds were evaluated). The author concluded
that daily weight gain improved 30.0%, feed conversion rate improvement
decreased the cost of each kg of live weight in R$ 0.205 (U$ 0.101), live weight
increased in 28.4% and livability reduced 2.0%. Also, the gains in terms of
performance approached the full genetic potential of poultry during this period, in
comparison to previous years. According to this study, birds achieved 85% of the
genetic potential of body weight gain and 93.4% of the feed conversion rate.
Drivers of Brazilian poultry production and poultry feed industries
for the upcoming years
Productivity growth of grains and broiler meat
Besides social, economic and politic factors quoted previously, other factors are
associated to the Brazilian poultry industry productivity and competitiveness. They
are related to the climate of the country (allowing lower costs on thermal control of
poultry houses), proportional to other countries low labor cost, fast assimilation of
new technologies, facilitated by the integration system, presence of a modern and
structured industrial park, associated with a relatively low production cost of
equipment and inputs for the whole production chain. All together help to decrease
the production cost, encouraging competitive exports (Mendes, 2010). Another
major driver of the growth of poultry industry is the availability of grains, mainly
corn and soybean, the main vegetal constituents of Brazilian poultry diets. Figures
2 and 3 highlight the evolution of Brazilian productivity of these crops both in terms
of total amount produced and yield of the grains from 1986 to 2010.
6
3
Figure 2 – Corn production in Brazil: Production (tons x 10 ), yield (Hectogram x 10 /hectare)
6
and area harvested (Hectare x 10 ).Source: FAO, 2012
6
Figure 3 – Soybean production in Brazil: Production (tons x 10 ), yield (Hectogram x
3
6
10 /hectare) and area harvested (Hectare x 10 ). Source: FAO, 2012
According to estimates from Brazilian Ministry of Agriculture, Livestock and
Food Supply (MAPA), the forecasts for the country´s increase in corn and soybean
production are 2.0 and 2.5%, per year, respectively, from 2011 to 2020/2021. The
same source suggests for broiler meat production, domestic consumption and
exports increases of 2.6, 2.5 e 2.9%, per year, respectively, during the same period
(Table 1) (MAPA, 2011). Factors such as the wide extension of land and huge
availability of water (Figure 4) favor the grain production of Brazil in the coming
years.
Grains
Broiler
Meat
Table 1. Production, domestic consumption and exports of broiler meat and
production of corn and soybean in Brazil during 2010/2011 and projections for
growth until 2021.
2010/2011
2020/2021
Increase
(%/year)
Production
12.23
15.74
2.60%
Domestic consumption
8.41
10.57
2.50%
Exports
3.82
5.17
2.90%
Corn
52.85
65.54
2.00%
68.72
86.53
2.30%
Soybean
6
* Unity = tons x 10
* Source = MAPA, 2011
Figure 4 – Availability of renewable
3
m /inhabitant/year). Source = FAO, 2012
water
resources
(surface
and
groundwater,
Focus on food safety and feed
The concept that feed and food safety are direct linked is increasing every year
(Hartog, 2003). Hence, the search towards a better management of feed quality is
a tendency which is expected to rise in the next years. This can be evidenced by
the increasing the use of Good Manufacturing Practice (GMP) and Hazard Analysis
and Critical Control Point (HACCP) systems by the industry, supported by govern
requirements. GMP is a system to ensure that products, processes, services and
buildings meet food safety (Anaruma, 2009), quality and legal requirements.
Restrictions on the use of antimicrobial agents as growth promoters
The restrictions on the use of antimicrobials as growth promoters (AGP), due to
consumer demands and to recent understanding of the interaction between
nutrients and intestinal health, intestinal microbiota, and immune system, are a
challenge for the Brazilian animal feed industry and it will require that nutritionists
change their paradigms. Brazilian regulatory agencies are evaluating all the
antimicrobial agents which can pose potential hazards for human health from the
scientific point of view, through the creation of Work Groups (GT) by Brazilian
Ministry of Agriculture, Livestock and Food Supply (MAPA). Already, some agents
had been banned as growth enhancers. In 2004 it was olaquindox, in 2005 it was
carbadox and in 2012 it was spiramycin and erythromycin.
Focus on sustainability
The term sustainability encompasses the actions and activities which aim to
supply human economic, environmental and social needs, compromised with the
long-term maintenance of natural resources for the future generations (Azevedo,
2012). When it comes to poultry nutrition, sustainability is related not only with the
formulation of least cost diets but diets that also optimize the economic
performance of the flocks. Thus, there will be an increase tendency to use some
new technologies.
The analysis of each feedstuff batch to allow more accurate feed formulation is
limited to wet chemistry techniques, which are usually expensive and timeconsuming. This limitation may be overcame by the use of NIRS (Near Infrared
Reflectance Spectroscopy), that allows immediate analysis of the energy value as
well as amino acid composition and digestibility of each feedstuff batch. In addition,
this technology can be used to analyze additives, and therapeutic compounds
(Penz-Jr et al., 2009). The design of new feed mills will have to consider the use of
NIRS, providing more storage, dosing, and milling flexibility, which will allow
savings that are unfeasible today due to the lack of physical infrastructure.
The progress in information technology will allow the application of growth
models and several related mathematical equations, which will estimate animal
growth according to rearing conditions. The ultimate objective will be optimizing the
rearing process, as a function of the company’s or farmer’s needs. Feed intake and
broiler growth prediction models under different scenarios, as those developed by
Emmans, Fisher and Gous, will allow better definition of strategies that will favor
production efficiency. Also, Gous (2005) mentioned that the idea of abandoning the
convention formulation proposal and adopting a dynamic proposal, based on
several factors, in addition to those considered in least-cost formulations, is not
new.
In order to decrease the impact of poultry industry on the environment, a
growing trend of Brazilian feed industry within the next few years will be the
formulation with higher quality raw materials, avoiding larger safety margins by
means of a better understanding of the nutritional content of ingredients.
Furthermore advances in the knowledge of the effects of particle size and feed
processing technologies, such as pelleting and expander on the digestibility of
nutrients for birds, will enable to improve the retention of feed nutrients by poultry,
decreasing their excretion to the environment. In this context, enzymes will be
increasingly used, as they improve ingredient digestibility and nutrient absorption,
as well as reduce the detrimental effects of anti-nutritional factors, thereby allowing
higher flexibility in the use of feedstuffs, reducing feed costs and pollutant excretion
in animal waste (Penz-Jr and Bruno, 2010). New mineral sources, with higher
bioavailability are under evaluation and it will be more frequently used in feeds.
Focus on biosafety
One of the keys to the current status of Brazilian poultry industry is the
advances observed in terms of biosafety within the last years, giving credibility to
Brazilian poultry products in high-demand markets, such as Europe, assuring
Brazilian leadership in exports. One of the milestones of the evolution of biosafety
in Brazil is the launching of the National Plan of Poultry Health (PNSA), by the
Brazilian government, back in 1994. The PNSA has many objective such as the
control of the entrance of products from animal origin inside the country,
standardized sanitation and disinfection procedures at farm level, prophylactic
control and biosafety standards (monitoring flocks and certificating those free from
specific diseases), establishing actions to ensure flock health, according to the risk
of occurrence of diseases and a plan of contingency in case of outbreaks
(Gonçalves et al, 2012; Santos and Falconi, 2007). According to Mendes (2010),
the tendency within the next years will be the increase in investments in biosafety
and quality programs, important concerns to maintain the leadership position of
Brazil within the world market of broiler meat.
Bottlenecks of Brazilian poultry industry
Despite the competitiveness of poultry industry, the country must tackle some
issues that still hinder its growth. One major problem is the logistics infrastructure
of the country, which leads to increases in costs due to losses in production, lack of
adequate logistic conditions, affecting both the access of grains (corn and soybean
meal) to the poultry production areas and the transport of broiler meat to the ports,
where they are sent for export. Also, the sharp increase in raw material costs
observed recently is a major concern for the poultry industry. During the last
months, feed cost increased, in average, 30%. Once in Brazil 85% of feed cost is
due to corn and soybean prices, increase the prices of these grains are associate
with a flattening of profit margins of producers (Mendes et al, 2012). Other issues
affecting Brazilian poultry industry are associated with non-uniform quality of the
educational system, lack of access to capital by the producer, the high cost of
credit, high social and labor charges, high tax burden, bureaucracy and high costs
of regulation (Mendes, 2010).
Conclusions
Technical, social and economic advances observed in Brazil throughout the last
four decades led the country to be the third and seventh largest producer of broiler
meat and eggs, respectively, and the largest world broiler meat exporter. Poultry
nutrition and genetic advances are supporting such strong growth. Still, there is
enough room for increases in corn and soybean production, and to the production,
domestic consumption and exports of broiler meat, too. A tendency of
consolidation for the poultry industry is expected within the next years, with a focus
on feed quality and food safety. Regarding feed production, technologies
associated with decreasing safety margins, with emphasis on economic and
environmental sustainability will be used more frequently. However, some
bottlenecks still hinder its growth such as problems in logistics infrastructure, low
quality of the educational system, lack of access to capital by the producer, the
high cost of credit, high social and labor charges, high tax burden, bureaucracy
and high costs of regulation.
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