Chicken embargo paralyzes units of the BRF and product price

To prevent an oversupply of chicken in the local market drop the price of the product, companies are preparing to give collective vacations in many of his plants, reorganizing production chain and pass hundreds of eggs, which would be fertilized, for trade and for the industry.
The eggs won't turn Frittata by chance. Since March, the industry has to deal with a autoembargo imposed by the Ministry of agriculture, livestock and food supply (Mapa) to countries in the European Union against the Brazilian units, most of them of the BRF, after reports of the presence of salmonella in products.
Much of that production was going abroad was in Brazil and the impediment to exports occurred at a time when domestic consumption is still not fully recovered from the recession. Also has heavy increase in the price of corn, one of the major inputs in the sector.
Owner of the brands Sadia and Perdigão, BRF holidays conferences give 30 days to slaughter poultry line of Rio Verde (GO) and to all who work on the production line of Carambeí (PR), starting in May. The Miners (GO) and Capinzal (SC) also suffered. The Aurora announced layoffs in a unit of Santa Catarina, in June.
"It's a perfect storm. Even if you are at acceptable levels, the production was affected by the return of the product is not exported. The layoffs are indicative of apprehension ", says Ricardo Santin, Vice President of the Brazilian Association of animal protein (ABPA). Exports fell 8 percent in January and 5% in February. The Brazil is the biggest exporter of chicken in the world.
With more chicken in the domestic market, the price of the product sold cold wholesale fell 17% in the State of São Paulo since November, the Center for advanced studies in applied economics (Cepea). For the consumer, the price of a kilo of the bird in basket also dropped: is 11% cheaper, according to Procon-SP, closing February to 5.20 reais.
"We expected a recovery. In 2017, the purchasing power of the Brazilian was less, but the market seemed like it would be less uncertain this year ", says Marcos Iguma, Cepea.
Who came first
The crisis in the sector concerned mainly the integrated producers – receive the chicks with one day of life, food and technical assistance to make the fattening of animals to slaughter. How are remunerated by the productivity, they depend on a strong market demand for chicken meat.
"If you ask the producer, he's going to say that there is already a hiperoferta," says Euclid Costenaro, integrated the BRF in Rio Verde. "The chicken is like an ocean liner: when a market fails to buy, take months to change the route and readjust. The oversupply could last until the middle of the year. "
Costenaro, which has 40 aviaries with capacity to produce 1 million birds per lot, will have reduced production by a third. He recalls that the chicken chain's problems also disrupt other industries. "If the chicken was cheap, the consumer reduces purchase of beef or pork. It's a ripple effect. "
"In Carambeí, before the lots came with an interval of 15 days. Now are 20 ", says Carlos Bonfim, President of the Association of poultry farmers of Campos Gerais, Paraná. "The slaughter will lessen, are talking about chickens unless 50000 per day."
He says that the eggs are fertilized, they are being boxed for trade and industry, headed for the manufacture of breaded or liquid egg, for confectionery.
The trend, in the assessment of experts heard by the State, is that the price of chicken will continue to fall for the next two months. The eggs can also fall, although the impact of larger product offer is less significant.
Resumption of exports?
The European Commission is expected to decide in a vote next Wednesday, on restrictions to the export of poultry from Brazil to the countries of the bloc, according to the Ministry of agriculture, livestock and food supply (Mapa).
"After the publication of the measure, it will be evaluated and will be taken the measures considered necessary, to restore trade flows," said the Minister, Blairo Maggi.
A month ago, the Ministry of Agriculture decided, precautionary way, temporarily stop the production and sanitary certification of products, especially of the BRF, to the block.
The BRF had eight units with suspended exports of poultry products to the European Union. The measure was adopted by Brazil to anticipate to European countries, which had already threatened to suspend all imports after Cheating, who revealed a fraud scheme in the analysis of the bacteria salmonella in batches.
"Brazil has a few frames that favor the resumption of exports. There are records of avian influenza in several countries of the European Union and this helps promote the image of Brazil, "says Mark Iguma, of the Center for advanced studies in applied economics (Cepea).
The Brazilian Association of Animal protein (ABPA) said she hoped an effective and rapid solution for the resumption of exports. The organisation points out that the Brazil exported more than 5 million tons of chicken meat to the bloc in the last ten years and "there was never any record of public health problems related to brazilian meat".
On the measures to be taken for the recovery of the sector, BRF said, in a statement, which did not comment on the question, for strategic reasons. Aurora foods and JBS also refused to comment.