Brazilian poultry: what can we expect for 2023?

“In Brazil, the future is doubtful and the past is uncertain”. This sentence, sometimes attributed to Pedro Malan, sometimes to Gustavo Loyola (both from the FHC government) summarizes the feeling of what “we can expect” for 2023. It is true that Brazilian poultry industry, in the last 50 years, has been predictable – and its constancy is even monotonous. With rare exceptions, there has always been growth. So if the historical basis is one of the only factors to make predictions, we could be optimistic for 2023.

But those who are sure about how the poultry and eggs market will behave this year, betting on this premise, may not have yet realized the innumerable variables involved, which I will talk about below. One of them – and a very important one – is…

Never underestimate the adaptability of a virus!

Since last October, an outbreak of Highly Pathogenic Avian Influenza (HPAI) has descended along the Pacific Coast of South America, causing the death of thousands of annual migratory birds and contaminating local free-ranging birds.

For evolutionists, this fact is unusual. This is because, for a virus (agent) to spread and perpetuate itself in nature, it should not “eliminate” its main host and means of dissemination: the migratory waterfowl that, for thousands of years, have left North America, in the winter approaching, to spend the summer in South America.

So, there are many questions whose answers we will perhaps find out in 2023:

• What is Mother Nature’s “coup” to produce such an overwhelming picture on the South American Pacific coast?
• Will the Andes and the Amazon Forest constitute a barrier to the arrival of this agent in the Pantanal, which could potentially reach the poultry “agriclusters” in the Midwest regions?
• Will the HPAI virus use migratory birds from the Atlantic route to reach Brazilian coasts?
• What is the potential impact on Brazil’s GDP if the HPAI reaches our industrial plants?

20 years ago, in an article we wrote for an OIE (currently named World Organization for Animal Health) event in Peru, our calculations predicted a negative impact of up to 0.33% on Brazilian GDP if HPAI hit our poultry industry. A few years later, the World Bank published a study estimating that the impact of the HPAI in Latin America could reduce the GDP of the affected country by up to 0.7%.

Since then, biosecurity has evolved a lot in this sector. Thanks to the actions of MAPA (Ministry of Agriculture and Livestock) and the industries in the sector, we now have sanitary barrier systems such as regionalization and compartmentalization, both accepted by the OIE to face problems of this type. All that remains is to “match” with our commercial partners.

But avian influenza is not the only concern for Brazilian poultry in 2023.

International ingredients make the list

Adding to the facts already mentioned, we have as ingredients of this “soup” (or would it be chicken soup?), the continuity (or not) of the conflict in Ukraine and the persistence of global bottlenecks in maritime transport (still reflections of the SARS-CoV-2 pandemic) that impacted, and may continue to reflect, on the international trade of grains and fertilizers.

In addition, there is a reduction in GDP growth in almost every country in the world. It is worth remembering that we export grains and animal proteins to more than two thirds of the countries on the planet. Finally, there is the political factor.

Brazil: political factor and environmental conditions

The new – but already known – government brings with it fiscal uncertainties. Therefore, there is an expectation of increased government spending, high interest rates and slower economic growth. Will 2023 (and years to come) be a replay of the past decade? It will not be a surprise, for some, if we have a significant slowdown in the growth of our GDP.

Fortunately, favorable climatic conditions for Brazilian agriculture, in the 2022-2023 harvest, may stabilize the costs of local animal production, bringing encouragement to the sector, whenever there are no radical economic-fiscal maneuvers.

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Paulo Martins is a veterinarian, Technical and Commercial Director at Biocamp.