Brazil’s chicken export disruption due to avian flu affects other proteins as US eyes opportunity

The avian flu outbreak and export restrictions on Brazilian chicken are likely to roil global prices and create effects that trickle to competing proteins, while opening up trade opportunities for key players, sources told Platts.

"Brazil is the world's largest and most important supplier of poulty, and it's only natural that any sanitary issue here raises global concern, leading to price volatility, not only in chicken meat but also in competing proteins and, domestically, in corn, which makes up around 60% of the feed used in poultry farms," Geraldo Isoldi, agricultural futures specialist at Terra Investimentos, said.

Brazil's chicken meat production in 2025 is projected at 15.25 million mt, up 1.66% year over year, while exports are expected to jump over 4% year over year to 5.09 million mt, according to the US Department of Agriculture's Foreign Agriculture Service.

However, revisions to the country's chicken outlook cannot be ruled out after the May 16 announcement by the Brazilian Ministry of Agriculture and Livestock confirming the detection of highly pathogenic avian influenza in commercial poultry.

Brazil accounts for about 35% of global supplies and over half of China's total imports.

So far, 16 countries have imposed total bans on Brazilian chicken meat, including key importer China, Isoldi said.

"If the outbreak remains under control, it is likely that the restriction will be scaled down to a state or even regional level," Isoldi said.

China's 2025 chicken imports are projected at 430,000 mt, down about 10% year over year, while domestic consumption is seen rising 0.5% year over year to 15.13 million mt, FAS data showed.

"Other major importers, such as Japan, have limited their restrictions to the state of Rio Grande do Sul, while countries like the United Arab Emirates and Saudi Arabia have adopted more moderate measures," Isoldi added.

Platts' assessment showed Chicken leg FCA Brazil at $2,180/mt May 20, down 4.39% day over day and 2.67% below the assessment April 22. Platts is part of S&P Global Commodity Insights.

Trickle-down effect on proteins

The restrictions from 16 countries on Brazilian chicken will effectively put chicken in competition with other protein supplies in the domestic market.

In Brazil, a decline in beef sales is seen in the domestic market due to the increase in non-exported chicken meat, Gustavo Figueiredo, partner and owner at Brazil's Radar Investments, said.

"This has a big impact on the domestic scenario," Figueiredo said.

"The halt in chicken meat exports due to bird flu puts pressure on meat prices on the domestic market," Figueiredo added.

Domestic consumption of beef and veal in Brazil is projected at 8.21 million mt (carcass-weight equivalent) in 2025, a marginal decline of 0.7% compared with the previous year, according to the FAS.

Similarly, Brazilian beef exports are projected at 3.75 million mt (carcass-weight equivalent) in 2025, up 3.07% year over year, FAS data showed.

In the wake of US tariffs and retaliatory tariffs from partner countries, Brazil was seen as a winner from potential trade pattern shifts, according to market sources.

While slowing sales of beef in the domestic market due to higher availability of non-exportable chicken may have an impact on Brazil's consumption outlook, it could also mean larger exportable supplies of beef.

While quality differences remain a factor, Brazilian beef is more competitive compared with that of its main competitor, the US.

Platts assessed the Brazil beef marker at $5,510/mt May 20, down 1.78% day over day, while 90CL beef CIF US was assessed at $6,526/mt on the same day.

Market opportunity for competitors

The flu's potential impact is higher outside Brazil than it is within the domestic market, Figueiredo said, adding that it will help boost chicken exports from competitors.

"The most recent report of HPAI presence in Brazil has prompted swift action from global trade partners," Kelly Colleran, commodity market analyst at S&P Global Commodity Insights, said. "Trade bans allow the opportunity for other players, like the US, to fill the import volume share."

Platts assessed the US chicken marker at $1,190/mt May 20, competitive with Brazilian prices.

"From what we are seeing, US producers and exporters are ready to capture additional market share; however, the immediate impact appears to be small unless we see increased spread," Colleran added.

In the wake of the restrictions levied on Brazilian chicken, associated-origin prices were reportedly surging at several key destinations, adding to the prospects for US supplies.

For instance, following the ban, Brazilian boneless chicken leg prices in the South Korean domestic market surged, with trades reaching Won 7,000/kg May 20, up from Won 4,200/kg before the announcement May 16.

"This situation can become more complicated in the coming months as Chinese importers look to find another source for lower-cost yet still acceptable quality chicken products," Colleran said. "It does appear to be a likely scenario that we will see support for US chicken exports, and it would be likely that prices will rise as a result."