29 May 2012

2 minute read

South America

In 2011, the sector saw growth of 5.2 per cent as well as turnover of $25 billion in feedstuffs and additives while producing 64.5 million MT of feed and 2.35 million MT of mineral supplements.

"The modest increase expected along 2012 will be gauged by livestock producers' performance that have suffered a lot because of higher costs of agricultural commodities and low domestics prices as well as exports slowdown for chicken, pork and beef," explains Ariovaldo Zani, CEO of Sindirações.

According to Mr Zani, the Brazilian livestock production chain has seen successful cycles of expansion, thanks to the continuous mobilization of technology and fostered by the global voluptuous appetite for animal protein. It already represents 6.5 per cent of GDP, has generated millions of jobs and is responsible for 18 per cent of the overall agribusiness exports.

Beef Cattle Feed

The beef cattle feed industry produced 2.7 million MT and 2.35 million MT of mineral supplements, an increase of 7.1 per cent and 9.8 per cent respectively in 2011.

Feedlots reached 2.8 million head and were characterised by a modest supply of bulls but offset by the slaughter of more cows. Despite relatively good prices paid to finished cattle, the cost for feeding accounted for 35 per cent of the overall feedlot cost and pressured raisers profitability.

By turn, in 2012, the feed industry expects to produce 2.9 million MT of feed and 2.6 million MT of mineral supplements, an increase of 5.6 per cent and 9.8 per cent respectively, due to increased feedlot growth rate of at least five per cent. Nevertheless this forecast is also dependent on the calves replacement market, possible cows retention cycle reversion, export opportunities for beef, etc.

Dairy Feed

Impacted by rising feedstuffs that increased the cost of production more than 20 per cent, the growth of 9.3 per cent resulting in 5.1 million MT of dairy feed in 2011 can be explained, in part, by limited supply of milk available in response to low quality of pastures and bad logistical effects that strengthened prices paid to milk producers during 2011 and pressured the profitability of dairy by-products manufacturers.

In 2012, the feed industry foresees an increase of 2.7 per cent and production of 5.2 million MT of feed due to the balance among the stimulation of milk production, lower prices paid to farmers and the continuous rate on milk imports.

Further Reading You can view the full report by clicking here.

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