Cheap chicken is believed to be a protein source in the pandemic. But suppliers that are more focused on beef are outperforming those who depend more on poultry. I Do Believe I Will Have The Chicken Nuggets T-Shirt
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American and Brazilian chicken producers are struggling amid oversupply, weak prices and sluggish consumption, with analysts arguing that production cuts may be needed to raise prices and margins protection. Beef suppliers have benefited from relatively stronger demand and prices.
In the United States, meat production has recovered from a viral disruption, meaning supply is exceeding demand amid sluggish food service sales. With beef production returning to normal, red meat is likely to compete with chicken for sale at grocery stores.
Peter Galbo, an analyst at Bank of America, said: “We will have red meat entering the market, and added that beef retail features are expected to increase“ significantly ”in. this fall.
Meanwhile, chicken prices are too low and demand is too weak to justify advertisements that could help generate revenue.
Sanderson Farms, America’s third-largest chicken producer, estimated last week their total production in the fourth quarter of fiscal 2020 would drop 5% from a year earlier. CEO Joe Sanderson predicts “lower holiday demand for all of our products.”
In the top chicken exporting country Brazil, lower yields or higher prices may not be inevitable to offset the I Do Believe I Will Have The Chicken Nuggets T-Shirt increased feed costs, says Ricardo Santin, head of the ABPA export group.
Domestic prices of corn and soybean meal were consistently at all-time highs amid strong demand and a weakening local currency fueled export appeal. According to Ana Luiza Lodi, an analyst at StoneX in Campinas, corn prices will stay high amid tight supply this year. The I Do Believe I Will Have The Chicken Nuggets T-Shirt Government is considering exempting import tax to lower costs. Nearly 80% of the cost of poultry production comes from domestic feed.
Brazilian poultry companies face weakness in both export and domestic sale. Traditional buyers like Saudi Arabia and the United Arab Emirates have substantially reduced their imports this year. Export prices in August fell 20% from a year earlier.
China is the exception, with Brazil’s exports to the I Do Believe I Will Have The Chicken Nuggets T-Shirt Asian nation up 28% this year. But China accounts for only 17% of Brazil’s chicken exports. The situation is different for beef, with record-breaking shipments this year driven by China, which accounts for nearly 60% of Brazil’s exports.
According to Cesar de Castro Alves, an agricultural consultant at Itau BBA, while the I Do Believe I Will Have The Chicken Nuggets T-Shirt Brazilian real currency fell, it increased export revenue in the local currency, but that was not enough to offset higher costs, reduce profits. of exporters since May. In August, the margin for chicken meat was negative 5%.
The domestic market did not help, with steady consumption despite lower prices. The discount of chicken on beef has never been greater. While demand for food services is showing some green buds, restaurant sales are still low and schools remain closed.
Alves, from Itau BBA, said in a phone interview: “Brazil’s chicken industry is at a crossroads, with producers increasing production amid weak export demand and rising costs. high. Producers need lower supply to lift prices and return profits, he said.