South America is a large and upcoming market in the egg industry. There is large growth potential due to the vast amount of natural resources found within the continent, which will allow for greater, more efficient egg production compared to other parts of the world.

Data section

Data from 2019 and The Development in 2020

Aspects of the South American Egg Industry

In a South American production, one would typically see that the production costs within a plant would be 60% eggs, ingredients, and packing, 30% labor, and the last 10% would derive from services, such as electricity and water. In other parts of the world, this distribution would look completely different, as aspects such as labor are much more expensive. Most eggs are sold in fresh markets and local neighborhood stores in the South.

There is great growth potential in South America within the egg industry due to the vast amount of natural resources the continent contains. With an expected growth for the industry of about 50% in the next 20 years, efficiency, productivity, biosecurity, food safety, and traceability will be determining factors in its competitiveness, becoming necessary to automate and introduce new technologies to make overall egg and poultry production more efficient. One of the biggest potential drivers of future growth for South America is Brazil. Several years ago, Brazil aimed to become the number one exporter of chicken, which they since then have achieved6. Now Brazil has set its sights on becoming the largest egg producer in the world7, hence, their extreme growth in 2019. 

Developments on the South American Egg Market

Developments on the South American Egg Market

Corona and 2021 Outlook

The Covid-19 pandemic has affected many aspects of life and all business industries. Some of the effects from this will be short-lived, while others will be apparent for years to come. During this pandemic, people’s lives have been defined by working at home, social distancing, the closing of restaurants, and virtual conferences and celebrations. Although these aspects just named are quickly changing as the Covid-19 pandemic gradually comes to an end, the economic aspect may impact the globe for a while longer.

When looking specifically at the two largest countries in South America, in 2019 there was a 2.2% drop in GDP growth in Argentina and 1.1% GDP growth in Brazil. However, in 2020, there was a relatively large drop in GDP growth in both countries, along with all other areas of the world, due to the hit of Covid-19 and the essential global shutdown. In Argentina, this consisted of an 11.8% drop in GDP growth, while in Brazil this decrease was under half of that in Argentina, giving a 5.8% drop in GDP growth. Looking at the expected outlook on GDP for the year 2021, both countries are expected to experience growth in their GDPs. Argentina expects a growth of 4.9% and Brazil a growth of 2.8% in GDP.

This expected GDP growth is a good sign for egg producers, as economic growth will mean greater opportunity for consumers to purchase the food they need etc. This is prominent in a continent like South America, where much of the population is going hungry and cannot currently afford a proper, nutritious diet. This GDP growth will likely further advancements in the egg industry in South America and allow the industry to grow prosperous, further improving economic growth. The hope is that economic growth will lead to more investment in a more efficient production by egg producers, which will allow the South American egg market to grow and suffice people’s hunger.

SANOVO TECHNOLOGY GROUP in the South American Egg Market (1)

SANOVO TECHNOLOGY GROUP in the South American Egg Market