6 minute read
Brazilian opportunities abound for products that can prove their effectiveness
Brazilian opportunities abound for products that can prove their effectiveness
Brazil imported a record $334.6 million worth of animal feed and pet food in 2022, a 3% growth in value from 2020. Indeed, imports have been steadily increasing over the past 10 years, a function of the country’s increasing animal production demands.
Amid this backdrop of growth, the American Feed Industry Association (AFIA) recently conducted a market assessment in Brazil, interviewing 52 professional importers, distributors, livestock producers, feed manufacturers, and associations, in order to better understand the opportunities and expectations of the Brazilian animal nutrition industry.
“Brazil is an economic leader in Latin America and is well respected in international arenas. Its growing livestock, poultry, and aquaculture sectors make it suitable for niche markets, like feed additives and U.S. feed ingredients,” Gina Tumbarello, AFIA’s Senior Director of Global Strategies, Policy, and Trade, told Feedinfo in a discussion about the results of that market assessment.
A GROWING, BUT HIGHLY CONTESTED, MARKET
Naturally, this is all underpinned by the impressive expansion in the country’s livestock production.
Brazil is the second-largest producer and the world’s largest exporter of chicken meat.
The USDA Foreign Agricultural Service’s office in Brazil (FAS) forecasts the country’s export volume for 2023 at 5 million metric tons, a 6% increase year-over-year.
Production is estimated at 14.85 million metric tons in 2023, a historical record and a 3% increase yearover-year. This is thanks to both improved domestic consumption and strong global demand. China is Brazil’s top export market and accounts for 34% of Brazil’s total production.
Meanwhile, Brazil’s beef production, traditionally organized around large-scale cattle grazing on natural grasslands, is now beginning to evolve towards more feed-dependent models as well, Tumbarello claimed.
“While pasture-based systems have historically been dominant, the country has seen some increases in feedlot operations in recent years, especially in regions closer to urban centers and where there is a greater demand for grain-fed beef.” FAS estimates Brazil’s cattle production will expand 1% in 2023, producing 48.2 million head. On the other hand, the swine sector is predicted to reduce stocks in 2023 on account of unfavourable weather and increased production costs, especially feed costs.
The upshot of all of this is an increase, in volume terms, in total demand for feed products.
“Overall, in Brazil, the animal protein industries are growing, demand for animal protein is growing, demand for Brazilian protein exports are growing,” she observed.
“Brazil’s feed additive and premix market is more mature than in other emerging markets and is highly competitive among key players including the United States, China, the European Union and other parts of South America,” Tumbarello explained.
The opportunity is, in fact, already being seized by many producers from around the world who have established themselves and their reputation on the ground.
“According to trade interviews conducted for our market assessment, we found that many Brazilian industry members believe their needs are being met by local supplies, yet they are often buying from multinational corporations, which are purchasing imported ingredients and additives,” Tumbarello reported. “Trade members lack awareness of their current usage of imported ingredients and additives.”
Most of Brazil’s feed additive and premix imports fall under the tariff code 230990, she notes. The EU is the largest trade partner in this category, followed by China, the United States, the Netherlands, Germany and France.
Not only is the EU the largest exporter of these products to Brazil, but its exports also now represent 44.3% of what Brazil imports, up from 34.9% in 2016. China’s market share has grown slightly since 2017, from 22.8% to 28.5% in 2022, although its market share in 2016 was up to 31%. The U.S. holds 11.5% of the market, but over the past decade has faced increased competition from the EU and China.
“This is an incredible opportunity for U.S. producers of feed additives and premixes, which complement and enhance diets and give producers and manufacturers options when the pricing is tight and quality product is a requirement,” she believed.
DEMONSTRATIONS OF EFFECTIVENESS BUILD CONFIDENCE
In order to break into the Brazilian market, therefore, it is critical for animal nutrition companies to differentiate their products’ quality, and most importantly, prove their worth under local conditions.
“When promoting feed ingredients in Brazil, building trust with the livestock and feed community is key, and part of that is demonstrating through validated data the efficacy of the products in question,” Tumbarello said.
“For example, it was remarkable how often the interviewees brought up the importance of ‘providing testing data’ and of obtaining samples so that local manufacturers and their customers could run their own field tests to ensure product quality and prove product claims were accurate. They also raised questions about competitor countries making claims about certain ingredients
without verifiable data to substantiate the claims.”
“The U.S. industry is seen as leading in quality and innovation but must develop trust among the Brazilian industry by providing data to support their products’ efficacy claims,” Tumbarello concluded.
PRODUCTION EFFICIENCIES, HEALTH AND ENVIRONMENT TOP OF MIND
The concerns that emerged from dozens of interviews with farmers and feed manufacturers were similar to those facing producers everywhere: how to improve the bottom line through more costefficient animal growth, greater nutrient absorption and feed conversion; how to ensure animals remained healthy and the food chain safe; and how to improve the environmental impacts of animal production, for example through mitigating the waste products resulting from their operations.
“As corn and soybean meal prices continue to rise and put pressure on the animal feed industry, feed additives and ingredients play a critical role in relieving financial pressure and instability while ensuring a nutritious and complete animal diet,” she observed.
Moreover, the imperative to find alternatives to antimicrobials in animal production is another opportunity for innovators in animal nutrition and health to shine.
In the Brazilian context, this has been a priority since at least 2019, when the Secretary of Agricultural Defense (SDA), part of the Brazilian agriculture ministry (MAPA), implemented restrictions on using antibiotic growth promoters, requiring those used solely for growth promotion to be classed as veterinary prescription drugs. The SDA aims to ensure that antibiotics are only administered to animals under the supervision of veterinarians for therapeutic purposes, such as treating diseases or preventing infections, and their use is now strictly regulated.
“There are U.S. feed additives that can provide viable alternatives to antibiotics, which, when added to animal feed, can improve growth, performance, and/ or livestock efficiency,” Tumbarello said.
