Impacts of the COVID-19 Pandemic on the Production Costs and Competitiveness of the Brazilian Chicken Meat Chain

Luiz Clovis Belarmino (), Margarita Navarro Pabsdorf and Antônio Domingos Padula
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Luiz Clovis Belarmino: Embrapa Temperate Climate, Brazilian Agricultural Research Corporation, POB 403, Pelotas 96010-971, Brazil
Margarita Navarro Pabsdorf: Faculty of Economic and Business Sciences, University of Granada, P. de Cartuja, 18011 Granada, Spain
Antônio Domingos Padula: School of Administration, Federal University of Rio Grande do Sul, Porto Alegre 90010-460, Brazil

Economies, 2023, vol. 11, issue 9, 1-18

Abstract: Sanitary requirements, geopolitical crises, and other factors that increase price volatility have an impact on the organization of markets and changes in investment policies and business strategies. The COVID-19 pandemic interrupted the trade of chicken meat, due to the drastic reduction in the circulation of goods, interrupted the supply of production chains, changed consumption habits, and made it difficult to reorganize business due to the slow resumption of operations by suppliers of inputs and in distribution logistics. The magnitude of these impacts has not been studied despite the high relevance of this economic dimension and the managerial implications for sector governance and trade management. The purpose of this study was to evaluate the economic impact of the COVID-19 pandemic on the production costs and competitiveness of the Brazilian chicken meat production chain. The methodology consisted of the detailed collection of information and data on private and social prices carried out using the Policy Analysis Matrix (PAM) method. The competitiveness coefficients and policy effects in the Brazilian broiler production chain before (2015) and during (2022) the COVID-19 pandemic were quantified and compared. Generally, the significant increases in the production costs of chicken meat (30.49%) caused a decrease in total factor productivity (−19.54%), a reduction in gross revenue, and lower tax collection. The pandemic has reduced the profitability of the chicken production chain in Brazil by 32.31%, reduced the competitiveness of exports, and worsened other economic indicators of the production chain. To the best of our knowledge, no other study has investigated the impacts of the COVID-19 pandemic on the competitiveness of the Brazilian chicken meat production chain. The PAM method allows for prices paid and received to be updated in real terms in projects representative of Brazil, the world leader in exports. This information is important for both national and international stakeholders. Additionally, this model is applicable to other meats traded in the international market, as it provides greater precision in business management and can estimate the impacts of risks on the availability or quality of food and health crises with robust results.

Keywords: poultry costs; production chain efficiency; politic; competitiveness; Brazil (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2023
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