Porto Alegre, May 7, 2021 – The housing of breeding chicks remains at a high level in 2021. This kind of strategy goes against the logic of the market in a year when corn prices quickly exceeded all expectations. As is known, animal nutrition has the greatest weight on the cost structure of a farm, and corn is the main raw material in feedstuff production. The corn supply is likely to normalize only with the arrival of the corn’s second crop in August. There are a few alternatives at this time, the best of which would be the reduction of demand by cutting housing in the case of chicken farming.
A cut in chicken housing would contribute to the market in two different ways. The first is that with less housing, corn consumption would fall, so helping to soften the process of price detachment of this raw material. Another aspect is that, with a tighter supply, there would be room for more consistent bullish movements within the chicken industry.
According to data from APINCO, Brazil housed around 1.72 billion head in the first quarter, up 3.9% from the same period last year. In last March alone, nearly 587.67 million head were housed, an increase of approximately 8.2% in comparison with March 2020. The estimate of housing made by SAFRAS & Mercado points to the housing of roughly 7 billion head of breeding chicks in 2021, a historic record, up 2.55% from 2020, when around 6.8 billion head were housed.