Broiler, pig production costs in Brazil rose in 2016

Average costs in 2016 for broiler farmers were 5 percent higher; costs for pig farmers rose 8 percent

December 2016 saw the trend of declining feed prices for Brazil’s poultry and pig producers continue, but overall average costs remained well above the start of the year.

According to the indices calculated by CIAS, the Central Intelligence Poultry and Swine with the Brazilian Agricultural Research Corporation (Embrapa), average costs for broiler and pig farmers were 5 percent and 8 percent, respectively, higher than 12 months previously.

Broiler cost index rose 5.4 percent in 2016

In December, the broiler production cost index (ICPFrango) stood at 209.7, which was 0.53 percent lower than in November 2016. Largest contributor to the fall was a reduction of 0.42 percent in feed costs, but the daily cost was also slightly lower than in the previous month.

In June, the index reached its peak for 2016 at just over 242.3. Despite following a downward trend over the following six months, average broiler production costs were 5.4 percent higher for farmers in Brazil in December than a year ago.

Nutrition costs account for just over 70 percent of ICPFrango, and feed costs have risen almost 5.9 percent over the year.

More expensive feed pushed up pig production costs in 2016

For pig producers, the average cost index (ICPSuíno) has fallen each month since its 2016 peak in June of a little over 253.7. For December 2016, it fell a further 1.6 percent to just under 219.7, which is almost 8.5 percent higher than 12 months previously.

Main contributor to the monthly decline, as for poultry, was a reduction of 1.6 percent in nutrition costs. These make up 77.7 percent of the overall ICP index for pig production. Other changes from November were minimal.

Despite the continuing downward trend in pig feeding costs, these remain almost 8.4 percent higher than a year ago.

The indices of production costs were created in 2011 by socioeconomics team of Embrapa Swine and Poultry and the National Food Supply Agency (Conab). The ICPFrango score represents typical broiler production costs for a ventilated poultry shed in the state of Paraná, while ICPSuíno is based on a typical “full cycle” pig production system in the state of Santa Catarina.