The storm has arrived in Brazil

01-10-2007 | |
Butland

After a few very profitable months for the Brazilian poultry industry during which they were able to pass on price increases allied to reasonable feed costs. This “lull” is now being shattered from an unforeseen direction.

After a few very profitable months for the Brazilian poultry industry during which they were able to pass on price increases allied to reasonable feed costs. This “lull” is now being shattered from an unforeseen direction.
European wheat problems are provoking a significant purchase of Brazilian GMO (Genetically Modified Organism) free corn with a huge premium over the Chicago price.
Using replacement costs Brazil live-bird costs will be higher than the USA, although still well below European levels.
As it will be difficult to pass on more significant price increases both locally and internationally, profitability will suffer. This situation shows how interconnected the global markets are and how difficult it is to predict where the next “event” (good or bad) will come from.

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