Agriculture in the Pan-Amazon: Swine and poultry – Adding value to farm production

The cultivation of soy and maize has brought additional benefits to the farm economy in Mato Grosso because it has increased the supply and affordability of feed rations for livestock producers. Although there is a robust international market for both commodities, the potential return for farmers in Mato Grosso is not as lucrative for maize when compared to soy. This is due mainly to the very substantial gap between maize yields obtained by farmers in the United States when compared to producers in Brazil, but also to the steep transportation costs that limit the profitability of producers in Mato Grosso. Consequently, the agricultural industry has a strong incentive to create livestock production systems that convert crop commodities into a product with greater market value.

The poultry and swine industries have expanded at about the same rate as the soy/maize complex in Mato Grosso. In contrast, poultry production in Rondônia and Pará, which do not (yet) cultivate significant areas of soy, declined over the same period in both states.

Brazil is the second-largest producer of poultry in the world and the largest exporter of processed chicken meat. The largest producing states are Paraná, São Paulo, Santa Catarina and Rio Grande do Sul, which are closer to urban markets and ports.

Nonetheless, Mato Grosso enjoys the fastest growth rate of poultry production in Brazil: Between 2000 and 2020, the total chicken population in Mato Gross grew an average of 7% per year, from 10 million to 60 million birds. About 75% of these are broilers (chicken raised for meat) that have a life span of between six and seven weeks, which means that Mato Grosso produced about 330 million chickens for slaughter in 2020. This translates into approximately 700,000 tonnes of meat, about 5% of Brazil’s annual poultry production.

The amount of maize and soy consumed by the production of broilers is dependent upon two factors: the composition of chicken feed and the feed conversion ratio (FCO), which is the metric animal scientists use to calculate the quantity of feed required to produce one kilogram of meat. Chicken feed is about 60% grain and 20% soy cake: the FCO for broilers is about 1.67, while hens have an FCO of 2.0 per kilogram of egg. This suggests that Mato Grosso’s poultry industry was consuming about 0.8 % of the state’s production of soy and about 1.9% of its maize harvest in 2015.

The situation for the swine industry is similar, except feeder pigs live between six to eight months and have an FCO of about 2.5. Taking into account the feed intake of sows, a swine herd of about three million pigs would consume about one million tonnes of feed, constituting about 1% of soy and 1.7% of Mato Grosso’s maize production annually.

Although local consumption of soy and maize by the livestock sector is not enormous, it is significant when viewed from an economic perspective. The swine and poultry industries generated about $US 1 billion dollars in gross sales in 2020, a value about three times greater than the unprocessed maize and soybeans fed to those animals. This is why the livestock sector can be viewed as a value-added component of the soy/maize production system. The livestock sector injects significant capital into the rural economy, most of which will be reinvested to expand production.

The growth of the livestock sector has been accompanied by the creation of the industrial infrastructure linked to these industries, specifically facilities dedicated to different stages of the livestock life cycle: breeding, brooding, grow-out, packing plants and associated logistics (Figure 3.11). The growth of these industries increases the demand for soy and maize, which will be met either by expansion through extensification or intensification.

In the first case, this will lead to new deforestation or, more likely, the conversion of remnant Cerrado habitat. Intensification also comes with the risk of environmental degradation, through either the conversion of forest remnants within agricultural frontiers or the displacement of beef ranching operations to the forest frontier. The poultry and pork industries can be viewed as indirect drivers of deforestation because they contribute to the expansion of both the farm and beef sector.

“A Perfect Storm in the Amazon” is a book by Timothy Killeen and contains the author’s viewpoints and analysis. The second edition was published by The White Horse in 2021, under the terms of a Creative Commons license (CC BY 4.0 license).

Read the other excerpted portions of chapter 3 here: