Argentinian broiler production on the rise

By Chloe Ryan

- Last updated on GMT

Broiler production in Argentina is to reach record levels next year
Broiler production in Argentina is to reach record levels next year

Related tags: International trade, Argentina, Trade

Broiler production in Argentina is expected to reach a record 2.1 million metric tons (mmt) in 2016, fuelled by growth in exports, according to a new US Department of Agriculture (USDA) report by marketing specialist Andrea Yankelevich from the US embassy in Buenos Aires. 

The growth in broiler production will be aided by lower feed costs and greater demand from export markets, including South Africa and the Middle East, the report stated. Broiler exports in 2016 are likely to amount to 250,000 tonnes (t), up 19% on 2015’s estimated figure.

Despite this, the outlook for the Argentine poultry industry remains challenging. Domestic consumption is estimated to be stagnant at 1.85mmt as consumption of other animal proteins remains strong.

And while poultry exports overall are increasing, some of Argentina’s main global export markets have shrunk considerably in recent years. Venezuela, historically Argentina’s largest market (over 40% of total exports), dramatically lowered its purchases in 2014. Other petroleum-producing countries decreased their purchases as a consequence of low global prices for petroleum, the report stated.

In mid-2014, the Argentine poultry industry sought to capitalise on the opportunity presented by Russia’s embargo on food imports from the USA, Canada and the European Union. “However, higher Argentine shipments to Russia only lasted a few months and ended with the devaluation of the rouble by the end of 2014,”​ according to the report. And Chile, traditionally one of the best markets for Argentina is now taking advantage of well-priced leg quarters offered by the US, cutting into Argentina’s market share.

High inflation, combined with a strong exchange rate, has put the sector in a competitive disadvantage, negatively impacting producers’ margins. And upcoming presidential elections are also contributing to an uncertain economic environment. In December 2015, a new administration will take office, and much of industry expects monetary adjustments to be made, according to the report.

Argentina is now seeking the opportunity to open new markets or increase volumes to existing markets such as Mexico, Canada or South Korea. “The sanitary conditions of the country as well as its production capacity continue to be excellent,” the report states, “which make Argentina a key player to meet growing global demand.”

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