A statement from Aurora noted embargoes imposed by Europe and Russia on certain Brazilian meat purveyors have had a negative effect on its operations, creating excessive supplies and causing product prices to fall, according to a Reuters report.
In April, the European Commission decided to ban meat imported from several Brazilian processing facilities stemming from concerns about sanitary controls, as per our sister site, FoodNavigator.
The plant where production is being halted is located in the Santa Catarina state and the 1,283 employees will be put on paid leave.
The work stoppage is set to start on July 2 the company announced. The facility reportedly generates about 12% of the company’s slaughter capacity in Brazil.
The production pause is an attempt to adjust capacity to demand. Job losses are not anticipated at this time, said the company.
It is the second time in just over a month Aurora has stopped production in Brazil, on the basis of market conditions related to trade bans and higher feed costs.
To add pressure to the poultry processing business, the company said the Brazilian domestic corn market is going through a period of 'speculative retention' that artificially inflates feed prices, as reported by Reuters.
This inflation, thus, aggravates the sector’s plight and obliges food processors to buy corn abroad in order to feed almost 520 million birds in Brazil, said Aurora.