Process Management

News 1161 views last update:6 Aug 2012

2.8% jump predicted for Brazil's 2012 feed production

Brazil's feed production is forecast to increase by 2.8% in 2012 compared to 2011, with production of 66.2 million MT of feed and 2.58 million MT of mineral supplements, according to the Brazilian Feed Industry Association (Sindirações).

In 2011, the industry saw growth of 5.2% as well as turnover of $25 billion in feedstuffs and additives while producing 64.5 million MT of feed and 2.35 million MT of mineral supplements.

In the first quarter of 2012, feed production reached 14.9 million MT, a decrease of 2% compared the same period in 2011. Broiler and swine demand represents more than 70% of overall feed and both dropped 1.1% and 6.1% respectively. Dairy and beef cattle showed a slight increase of 1.2% and 1.1%, while egg-laying hens remained virtually unchanged.

According to iAriovaldo Zani, CEO of Sindirações, "The recent pricing reduction for corn this year and the generous winter harvesting coming are supposed to keep prices under the average displayed last year," he said. "Nevertheless to say that corn price skyrocketed since middle 2010 and achieved 54 p.p. by March 2012 and it remains impacting a lot the cost of production of livestock feeding. The soybean meal price, in turn, has increased nearly 40% through April this year due to shrank international liquidity, while the minimum wage rate adjustment impacted the payroll of labour employed."

Broiler Feed
Broiler production represented 50% of the overall demand for feed in 2011 and is expected to consume 33.2 million MT in 2012, an increase of 3.1%.

Layer Feed
Production of feed for laying hens increased 2.6% and reached 5.1 million MT in 2011 in response to average housing of 79.7 million chicks as well as the domestic egg consumption growth of over 9% and 162.5 eggs/capita.

Egg exports decreased 45%. The supposed low egg price during the current year and increasing trends of chicks housing has driven the feed industry to forecast a growth of less than 3% on layer feed, at around 5.1 million MT in 2012.

Beef Cattle Feed
The beef cattle feed industry produced 2.7 million MT and 2.35 million MT of mineral supplements, an increase of 7.1% and 9.8% respectively in 2011. Feedlots reached 2.8 million head and were characterized by a modest supply of bulls but offset by the slaughter of more cows. Despite relatively good prices paid to finished cattle, the cost for feeding accounted for 35% of the overall feedlot cost.

In 2012, the feed industry expects to produce 2.9 million MT of feed and 2.6 million MT of mineral supplements, an increase of 5.6% and 9.8% respectively, due to increased feedlot growth rate of at least 5%. Nevertheless this forecast is also dependent on the calves replacement market, possible cows retention cycle reversion, export opportunities for beef, etc.

Dairy Feed
Influenced by rising feedstuffs that increased the cost of production by more than 20%, the growth of 9.3% resulting in 5.1 million MT of dairy feed in 2011 can be explained, in part, by limited supply of milk available in response to low quality of pastures and bad logistical effects that strengthened prices paid to milk producers during 2011 and pressured the profitability of dairy by-products manufacturers.

In 2012, the feed industry foresees an increase of 2.7% and production of 5.2 million MT of feed due to the balance among the stimulation of milk production, lower prices paid to farmers and the continuous rate on milk imports.

Swine Feed
In 2011, 15.4 million MT of swine feed was produced, and the same is projected for 2012,

Fish, Shrimp Feed
The demand for fish feed in 2011 was 500,000 MT, representing a 33% increase over 2010. This growth is in response to increasing continental fish production.

The feed industry perspective for 2012 is to produce 560,000 MT of fish feed and not more than 75,000 MT of shrimp feed.

Editor AllAboutFeed

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