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Live animal loads at risk as some have been blocked for more than 50 hours.
May 24, 2018
A truck driver strike over higher fuel taxes is worsening in Brazil, with many different sectors, especially agriculture, now reporting significant impacts. In an attempt to ease tensions, Brazil's state-controlled oil company Petrobras announced May 23 a two-week, 10% reduction in fuel prices, but the truckers were not appeased.
“The movement is getting bigger,” said Emerson Wohlenberg, business development manager for the Informa Economics IEG office in Porto Alegre, Brazil. “Even food supply to cities is being affected right now. Yes, we will see delays in shipments and exports. Shutting down production is a consequence, but I still don’t think this will hold more than one week.”
Truck driver leaders have relayed that they refuse to end the strike until the fuel taxes are officially eliminated. Bloomberg reported that fuel prices have increased around 50% over the past 12 months.
Specific to agriculture, the grain sector is the most affected right now as trucks are not arriving to their destinations, Wohlenberg said.
However, the Brazilian Association of Meat Exporting Industries (ABIEC) and the Brazilian Association of Animal Proteins (ABPA) reported that the strikes are also affecting the meat sector and putting livestock at risk.
On May 24, ABPA said despite a May 23 promise from truck driver leaders to release live loads, it still hadn’t happened. The group has received reports from producers that their trucks transporting animals had been stopped at blockades across the country. There are cases of animals going more than 50 hours without feed, the groups said.
The circulation of feed trucks has also been blocked at various points, putting animals at risk of hunger, the group added.
According to a joint statement from ABPA and ABIEC, 129 production operations in the beef, pork and poultry sectors have already been suspended. Further, the organizations said more than 90% of animal protein will be interrupted if the 208 factories of various sizes stop in Brazil.
The groups said road blocks on highways prevent access to the necessary inputs for livestock production. Lack of transportation also halts the export of 25,000 tons of chicken and pork, which is equivalent to a revenue of $60 million no longer being generated for the country. In regard to beef, 1,200 containers will no longer ship each day the strike continues, they said.
Damage to the production system is severe and will take weeks until the normal pace in some production units is restored, ABPA said.
David Williams, global protein director for IEG, said a weeklong shutdown will put the Brazil meat processors back four to six weeks with domestic and international customers.
ABPA appealed to the truck drivers' movement to keep their promise by releasing the transport of animals and feed in all blocks, as well as the minimum withdrawal of products in the factories for the resumption of production. The group said the protests are fair but called for the the truckers to avoid perpetuating the situation to animals.
According to ABPA and ABIEC, more than 85,000 employees of the animal protein industries and cooperatives of various sizes have also been affected. This has extended to the various suppliers of inputs as well.
The groups said smaller towns and metropolitan regions, which maintain a product delivery cycle every two days, are already suffering from compromised supplies. This could hit major centers in the coming days, they added.
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