Floods in RS could spread high chicken and pork prices across Brazil | Livestock

With the risk of shortages decreasing, the The immediate effect of the floods in recent days in Rio Grande do Sul for the poultry and swine sector is an increase in prices. Chicken prices remain stable, but live pig prices are already registering increases in the southern region of the country. And the assessment of analysts and industry sources is that the rise in prices, in both cases, should migrate to other regions of the country.

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The exception is cattle farming. The Gauchos are cattle producers and, like the local slaughterhouses, experience several problems resulting from the rains. However, the predominant breeds are European, adapted to the cold, and with little circulation outside Rio Grande do Sul. This indicates that arroba beef prices in Brazil should continue to fall or remain stable, pressured by the still high supply.

Data compiled by consultancy Agrifatto show that, in the last seven days, the value of live pigs rose 4% in Paraná, to R$ 6.09 per kilo. In Santa Catarina, the increase was 6.2% in the period, to R$5.88. In Rio Grande do Sul, the increase was 2.3%, to R$5.97 per kilo.

In chicken, prices for the three states remained stable, but Yago Travagini Ferreira, head of animal protein at Agrifatto, believes that the advances that will occur will not be restricted to the South.

“I would say it could go up, in the short term. Rio Grande do Sul is among the three largest pig and poultry producing centers in Brazil and the municipalities experiencing public calamity account for more than 65% of the state’s poultry/swine herd”he stated.

Furthermore, a large part of the poultry and pork industries are in the affected municipalities.

“The industry has already started operating again, however, the problem is measuring the number of farms that were destroyed, the logistics of getting to these farms and getting nutrition to these animals”he argued.

In this scenario, Ferreira assesses that there may be an impact on pricing in other regions, “especially in the next 30 to 60 days. But there shouldn’t be an explosion in prices.”

Fernando Iglesias, analyst at consultancy Safras & Mercado, said that the supply of poultry and pork was compromised during the most critical period for slaughterhouses. He also assesses that there may be an increase.

“We should see some progress in the coming weeks [de preços]and then it could impact other regions of Brazil if the production bottleneck continues for a longer period”, stated the analyst.

So far, the Brazilian Animal Protein Association (ABPA) and the poultry and swine associations in Rio Grande do Sul estimate that the State’s production system could take 30 days to recover. The strategy is to move the animals to industrial units that are operating normally and deliver feed to the farms.

The president of the Rio Grande do Sul Pig Breeders Association (Acsurs), Valdecir Folador, said that the days of the most serious situation were from April 30th to May 5th, when the roads were almost all blocked. Since then, companies and cooperatives began to clear the roads and gain access to producers and farms.

“Things are better, feed is arriving at practically all farms, access has been opened. We are not in 100% full condition, but very close to it. The movement of animals from one phase to another and to slaughterhouses is also moving closer to normal.”, he stated.

Now, Folador is dedicated to measuring structural damage to farms that were totally or partially destroyed. “By the beginning of next week we should have a more concrete idea regarding this issue.”

In the case of cattle, for now, the perception of the director of Scot Consultoria, Alcides Torres, is that the problems in Rio Grande do Sul should not have an effect on the prices of arroba or meat.

“I don’t believe there will be an impact on the price of fat cattle. Especially because we are, in the rest of Brazil, in the midst of drought and supply is increasing. Pasture conditions worsen and ranchers have to send cattle for slaughter. And, with supply increasing, prices tend to be stable at best,” he said.