With production costs on the rise, chicken prices should continue to rise, says expert

Chicken meat prices will follow the upward trend and, at least for the next two months, should become even more expensive for the final consumer.

This forecast made by experts in the sector for the coming months is explained by the high costs of corn earlier this year, which end up being passed on to poultry producers, resulting in higher chicken prices.

Corn is one of the main inputs used in animal feed.

According to Hyberville Neto, consultant and director of HN Agro, this price increase will not be even stronger due to the pressure of inflation impacting on the pockets of Brazilians.

“The wholesale price of chicken has been rising and this tends to be passed on to retail, although this pass-through depends on the purchasing power of the consumer, which is greatly affected by the economic situation. This transfer will only not be higher precisely because the purchasing power of the population is impaired”, he explained, noting that, at the same time, it is necessary to pay attention to the dollar, which can affect exports and, thus, cool down wholesale prices. .

Already the price of frozen chicken, since the beginning of the year until now, rose 21.8% at wholesale. In this month of April alone, there was an increase of 4.9%. The wholesale price per kilo started in April at R$ 7.56 and, until Monday (11), was already at R$ 7.93.

However, according to the consultant, one of the positive forecasts is the possibility of a slight drop in the price of beef, which can help to stop the rise in chicken prices. This reduction is expected due to the beginning of the dry season in the country, which ends up increasing the supply of beef.

“During this period of April and May, with the reduction in the quality of the pastures, there is a need for the rancher either to supplement these cattle with feed and put them in confinement, or to sell them, which usually happens. And when he sells it, he ends up increasing supply, which puts pressure on the price of cattle, which can cause a drop, albeit modest, in the value of red meat and help to stop the rise in chicken prices,” said Hyberville.

There is also a slight downward trend in pork prices. This occurs in the face of the adverse scenario of exports and the drop in pork prices in China.

This month, the average wholesale price started at R$ 8.09 and had a slight increase, reaching R$ 8.12 in the quotation on Monday (11). This scenario can change, at least in wholesale.

Outlook for the end of the year

Expectations for the coming months are for improvements in terms of production and a drop in corn prices, an increase in the supply of poultry and the continuity of chicken meat exports.

In view of this current scenario, which could change if there is a worsening in exports and a consequent decrease in supply, the tendency is that from the second half of this year onwards the price of birds will fall again, as explained by Sérgio de Zen, Director of Conab’s agricultural policies.

“Brazil will now have a significant corn crop, something around 125 million tons, maybe more. This gives some encouragement in the face of Ukraine’s difficult situation. The short-term horizon is now a trend to continue at high price levels.

However, with the fall in the price of corn, we can project a certain reduction towards the end of the year in the value of chicken and, with that, we will have a reduction in food costs for the general population”, he said.