Avian flu in commercial production would even affect inflation – 05/24/2023 – Vaivém

The concern with an eventual arrival of avian influenza to commercial farms in the country makes perfect sense. It was reinforced by the 180-day zoosanitary emergency measure declared by the Minister of Agriculture, Carlos Fávaro, on Monday (22).

For the time being restricted to wild birds, avian influenza does not have major effects on the national poultry chain, although it removes from the country the privilege of, until then, being the only large one and being seen in isolation, but as an important set within the economy.

Poultry production employs 213,200 workers inside the gate, according to data from Cepea (Center for Advanced Studies in Applied Economics), which was based on information from the PNAD-Contínua of the IBGE and Rais (Annual List of Social Information) of the Ministry of Labor and Employment.

In many cases, they are small producers who make their living exclusively from this activity. Another 294,200 workers, according to estimates by Cepea, are in the agroindustry, dedicated to slaughtering poultry and preparing meat.

The production of this protein also encompasses many workers in the areas of services, transport, the financial sector and ports.

An eventual arrival of the disease to the farms means the elimination of the birds, with serious financial losses and social instability for the producers.

Even the United States, a country with greater resources than Brazil, is struggling to repair the economic damage caused by the disease in the country.

Highly pathogenic avian flu has been present on US farms since the beginning of 2021. There are already 836 outbreaks of the disease, spread across 47 states.

According to data from the USDA (Department of Agriculture) this Tuesday (23), 58.8 million birds have already been killed. The government has spent billions to fight the disease.

Brazil is the world’s second largest producer of chicken meat, obtaining 14.5 million tons per year. The United States produces 21 million, and China, the third largest producer in the world, 14.3 million. The world consumption of chicken meat is 101 million tons.

Brazilians are, however, the world’s largest exporters of the protein. In 2022, they placed 4.8 million tons on the foreign market, 35% of the international trade flow of this protein. China, by importing 541 thousand tons, was the main Brazilian partner. The United Arab Emirates, Japan and Saudi Arabia are also on the list of main importers of Brazilian beef.

Revenues from foreign sales are important for the sector. They have been growing year by year and, in 2022, totaled US$ 9.7 billion, according to Secex (Secretary of Foreign Trade).

The eventual arrival of the disease in commercial activity will also affect the entire population, just as it did in the United States. There, the reduction in the supply of meat and mainly eggs led to more inflation on the consumer’s table. In Brazil, the reflex would be the same.

The turnover of the economy will also be lower. In 2022, the gross value of poultry production inside the gate reached R$ 112.1 billion, money that was distributed to thousands of small properties.

A possible reduction in the supply of meat does not only affect the foreign market, but mainly the domestic one. According to the ABPA (Brazilian Association of Animal Protein), 73% of the meat produced in the country is destined for domestic consumption. The remaining 33% go to the foreign market.

The southern states would be the most affected by the arrival of an eventual avian flu in commercial production. In addition to being the largest domestic producers, they are also the main exporters. Last year, the three southern states were responsible for 64% of national production and 79% of Brazilian exports of chicken meat.

Reflections would also fall on the Midwest, the main producer of soy and corn, two essential components in the composition of animal feed. Domestic demand for corn, currently estimated at 80.4 million tons, would be reduced, depending on the extent of the disease.

A lower demand for corn affects the producer in the field. The country has been obtaining record harvests in recent years, and prices, both internal and external, are low.

The death of laying hens would also affect the growing production of eggs in the country, which already adds up to 52 billion units per year. The value of this production inside the gate is R$ 20.2 billion.

Consumption of chicken meat and eggs by Brazilians has been increasing. They are lower-cost proteins for consumers, and spending is what best adapts to the period of short income and weak economic performance.

According to ABPA, the annual consumption of chicken meat is 45.2 kg per inhabitant per year, and that of eggs, 241 units.

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