Dec 19, 2013

Feed Manufacturers in Brazil Expecting 3% Growth in 2014

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

After two years of high commodity prices and lack luster demand, feed manufactures in Brazil are hoping for a growth in feed sector in 2014. According to the National Syndicate of Feed Industries (Sindiracoes), the total feed consumption in 2013 is estimated at 63 million tons which was unchanged from 2012. Manufactures are hoping for a 3% increase in 2014 to 64.9 million tons. Brazil is the third largest producer of animal feed in the world.

Demand for feed in the poultry and hog sectors declined 1.3% and 0.6% respectively in 2013, but demand increased in 2013 for egg production, milk production, and fish production. Feed demand in the egg industry increased 5% during the first nine months of 2013 to 4.18 million tons, it went up 2.5% in the dairy industry during the same period to 3.88 million tons, and it increased 12.2% in the fish industry to 550,000 tons.

High prices for soybean meal and corn were the main driving factors over the last two years and while the feed demand in these smaller sectors increases, it's the production of hogs and poultry that accounts for the vast majority of the feed demand in Brazil. During the first nine months of the year, the broiler industry consumed 22.4 million tons (48% of the total), the hog industry consumed 10.96 million tons (14.3% of the total), layers consumed 4.18 million tons (9% of the total), the dairy industry consumed 3.88 million tons (8.3% of the total) and feedlots consumed 2.17 million tons or 4.6% of the total.

Sindiracoes is expecting Brazilian poultry production to increase 4% in 2014 with exports up 3% and they are expecting hog production to increase 9% in 2013. The demand for red meat and lower corn prices are expected to result in more cattle placed on feed in 2014. In 2013 the amount of feed used in feedlots declined 4.2% as ranchers opted to keep more cattle on pasture during the first half of 2013 instead of being placed on high priced feed.