Meatpackers await Christmas less profitable

For the second year in a row, the Christmas dinner will be shy and less profitable. Amid the deterioration of household income, refrigerators and retailers not only failed to fully pass on the sharp increase in production costs, as will hardly in 2017-at least in the first half.
While working with the expectation of new drop in sales of peru-traditional item of the holiday season-and sales-migration to cheaper brands, the chicken meat industry expect the re-composition of the banks by reducing costs, particularly corn. And, how the economy reacts, the chance of a rate increase to consumers, which was suggested a few months ago as a possible inflationary pressure to 2017, is dwindling. In fact, weaker demand in the beginning of the year have caused the fall in prices on the radar, said an analyst at MB Agro, César Castro Alves.
"It''s going to be quite tricky pass price. Our vision in this regard is quite pessimistic, "admitted the commercial Director of multivarejo of the GPA (Grupo Pão de Açúcar), Robson vines, in relation to the next year. According to the Executive, the retailer failed to readjust, "in magnitude required", chicken meat prices this year. More than that. On the strength of the Brazilian consumer, promotions have become frequent. "That''s why you see us doing more aggressive offerings", justified Vines.
Still, the retailer saw sales of chicken meat decreased. "We''ve lost enough volume of chicken this year," said Pagunsan. Executive assessment is corroborated by consumer data published Tuesday by the ABPA (Brazilian Association of Animal protein). In 2016, the per capita consumption of chicken meat decreased by 4.9%, from 43.2 to 41.1 pounds, the lowest level of the Decade.
In this context, the traditional increase in margins obtained by the meat industry in the last few months of the year tends to be limited, agreed the commercial relations of the consultancy GFK, Marco Aurélio Lima. Last year, the Christmas meats processed R$ 670 million, according to the Nielsen consulting. Of this total, R$ 130 million are from the Turkey meat and R$ 270 million special birds.
Among the main industries of chickens and pigs in the country, only the harvest-subsidiary of JBS-planned a substantial increment in sales of Christmas meat. To the marketing director of Seara, Edward Bernstein, there may be a small movement "of migration to cheaper brands for Christmas, but the JBS has in its range of regional brands-cheaper-an asset to cross the '' downtrade '' coming marking the year.
Given this, the JBS has increased the volume of Christmas items produced in "double digits," said Bernstein. "We are prepared to meet any need for democratic way," he said, citing the regional brands Big chicken and M. "[But] we have to hold our profit margin," he added.
Aside from JBS, executives from other industries heard by the value they expect stable sales of special birds this year. According to the commercial Director of Santa Catarina Aurora, Leomar Somensi, the volume of Christmas goods offered is virtually the same in 2015. The prices of these products, it said, were between 7% and 10% more expensive, insufficient to compensate for the increased costs seen in 2016, which seems to be a consensus in the industry. "The cost that we had, the chicken didn''t come up as much as we thought," said the Chief Executive of ABPA, Francisco Turra.
In the Grupo Pão de Açúcar, the volume of Christmas meats will also be repeated, said Pagunsan. But the '' mix '' of products will be different, with greater participation of the retailer''s own brand. In revenue, the expectation is 10% growth in Christmas sales.
Leader in this field with the brands Sadia and Perdigão, BRF predicts that Christmas will have a similar behavior to that of last year, with stable sales of chickens and drop in sales to peru, said the General Manager of the company in Brazil, Rafael Ivanisk. On the other hand, the tendency is to grow the demand for swine cuts, relatively cheaper than beef. As well as competitors, the BRF also lost margins, said Ivanisk. "Because of the corn, did transfer, but we are absorbing something [cost]".