🌎 Brazil’s Poultry Industry Faces a Tough Reality
Brazil, the world’s largest poultry exporter, has long dominated global markets due to low production costs, high efficiency, and strong demand from Asia, the Middle East, and Europe.
However, August 2025 has brought troubling news for Brazilian poultry producers. According to the Centre for Advanced Studies on Applied Economics (Cepea), chicken farmers — especially in São Paulo and other major producing states — are experiencing a severe margin squeeze:
- Feed costs are skyrocketing.
- Live chicken prices have fallen 3.4% month-on-month.
- Domestic demand is weakening due to inflation and protein substitution.
- Export competitiveness is at serious risk.
Let’s break down Cepea’s findings and explore what’s happening inside Brazil’s poultry sector.
📈 Rising Feed Costs Squeeze Profit Margins
Feed makes up 65–70% of poultry production costs. In August 2025, both corn and soybean meal prices surged, leaving farmers with higher expenses and lower profits.
🌽 Corn Prices Skyrocket
Corn — the primary component of poultry feed — has become significantly costlier:
- Prices jumped 8% in August 2025 compared to July.
Key factors driving the spike:
- El Niño-driven droughts cut yields in Mato Grosso and Paraná, Brazil’s main corn-producing regions.
- China’s increased imports tightened global supplies.
- Rising logistics and storage costs inflated domestic prices.
For poultry farmers, this means higher cost per bird, forcing many to cut back on production or absorb losses.
🌱 Soybean Meal Costs Surge
Soybean meal — the second-most important feed ingredient — also saw sharp price hikes:
- Global demand, particularly from Europe and Southeast Asia, increased prices.
- Domestic processing bottlenecks reduced meal availability locally.
- A weaker Brazilian real made soybean exports more lucrative, leaving less supply for poultry producers.
Together, corn and soymeal costs have created a double blow for chicken farmers, making feed efficiency critical for survival.
📉 Falling Live Chicken Prices Add to the Pain
While feed costs rose, live chicken prices dropped, worsening the profit squeeze:
- Cepea reported a 3.4% decline in August 2025.
- Prices averaged R$5.47 per kilogram (~US$1.00/kg).
- Weak demand at the end of August dragged prices lower, despite early-month gains.
This mismatch — rising costs + falling revenues — has forced many small-scale farmers to operate at a loss.
💰 Domestic Demand Weakens Amid Inflation
Brazilian households are tightening their food budgets:
- Food inflation has reduced purchasing power.
- Many consumers are shifting toward cheaper proteins like eggs 🥚 and pork 🐖.
- Rising energy prices have indirectly increased poultry processing and distribution costs.
As a result, domestic chicken demand is softening, leaving farmers even more dependent on exports.
🚢 Brazil’s Poultry Exports at Risk
Brazil exports chicken to over 150 countries, with major buyers including:
- China 🇨🇳
- Saudi Arabia 🇸🇦
- Japan 🇯🇵
- European Union 🇪🇺
But rising feed costs threaten this dominance:
- Exporters must choose between absorbing costs or passing them to buyers.
- Higher prices could push global importers toward competitors like Thailand and the U.S.
- Trade partners may diversify sourcing to reduce dependency on Brazil.
If Brazil loses its pricing edge, it could face a long-term export slowdown.
🌦️ Climate Impacts Intensify Cost Pressures
El Niño has worsened Brazil’s cost crisis:
- Lower rainfall has reduced corn and soybean yields.
- Droughts in producing regions raise transportation costs as supply routes become constrained.
- Extreme weather events are expected to persist into late 2025, putting further pressure on grain availability.
This highlights the growing need for climate-resilient farming strategies.
🔍 Challenges Facing Brazilian Poultry Farmers
According to Cepea, several structural challenges are emerging:
- 🌽 Volatile feed prices driven by global demand and climate risks.
- 🐓 Falling domestic chicken prices despite higher production costs.
- 💹 Currency fluctuations increasing export-related uncertainties.
- 🌱 Sustainability demands from international buyers requiring welfare-friendly systems.
- 🌍 Rising competition from Thailand, India, and the U.S.
💡 Strategies to Survive the Cost Crisis
Experts recommend several approaches for poultry farmers:
- Precision feeding to reduce feed wastage.
- Alternative protein sources like insect meal and DDGS to offset corn reliance.
- Automation and AI-based monitoring to improve flock health and cut labor costs.
- Forward contracts with exporters to hedge against volatility.
- Leveraging government subsidies to stabilize margins.
These strategies could shield farmers from extreme cost swings.
🌍 Global Implications
Brazil produces 35% of the world’s chicken exports. If production slows:
- Global poultry prices will likely rise.
- Importers may diversify sourcing to avoid price shocks.
- Competitors like India and Thailand could expand their global footprint.
This ripple effect means Brazil’s poultry crisis isn’t just local — it’s global.
📊 Future Outlook
Looking ahead to Q4 2025:
- Feed prices are unlikely to drop before early 2026.
- Domestic chicken prices may recover slightly if inflation stabilizes.
- Export demand should remain strong, but Brazil’s pricing power will weaken unless costs stabilize.
- Farmers will need innovation and efficiency to stay profitable.
📝 Final Thoughts
Brazil’s poultry powerhouse status is under threat. Cepea’s August 2025 report paints a clear warning:
- 🌽 Feed costs are rising rapidly.
- 🐔 Live chicken prices are falling.
- 📉 Profit margins are shrinking fast.
For Brazil to maintain its global leadership, poultry farmers must adopt smarter strategies, invest in sustainability, and leverage technology to stay competitive.
❓ FAQs
Q1. Why are Brazil’s chicken farmers facing financial losses?
A: Because feed prices have surged due to higher corn and soymeal costs, while live chicken prices have dropped.
Q2. How much did live chicken prices fall in August 2025?
A: Prices fell 3.4% to an average of R$5.47/kg (~US$1.00/kg).
Q3. How does this impact global chicken exports?
A: Brazil may lose its price competitiveness, opening the door for rivals like Thailand and the U.S. to capture market share.
Q4. How can Brazilian poultry farmers cope with rising costs?
A: By adopting precision feeding, using alternative proteins, automation, and securing forward contracts to manage volatility.
Q5. What’s the outlook for Brazil’s poultry industry?
A: Export demand remains strong, but profitability will stay under pressure until feed prices stabilize.