Santa Catarina's Poultry Sector Combines Record-Breaking Export Figures with New Tax Regulations in 2026

Santa Catarina's Poultry Sector Combines Record-Breaking Export Figures with New Tax Regulations in 2026

The state consolidates its international leadership in poultry production backed by sanitary excellence, while the supply chain adapts to a new fiscal and cost architecture.

Santa Catarina's agribusiness is experiencing a period of intense activity and restructuring in 2026. Driven by the strength of foreign trade and a rigorous integration model with family farming, the state's poultry sector has hit historic revenue milestones while absorbing important updates to its tax and operational dynamics.

Historic Records in Foreign Trade

Consolidated data from the Center for Socioeconomics and Agricultural Planning (Epagri/Cepa) reveal unprecedented performance for the state's poultry industry. Between January and May 2026, Santa Catarina's chicken meat exports reached USD 1.15 billion, the highest nominal value recorded for the period since the historical series began in 1997.

The volume shipped in the first five months of the year totaled 543,100 metric tons (a 9.4% increase), while revenue grew by 13.5% compared to the same period of the previous year. The upward trend remained firm in the following months, with total meat shipments from the state reaching 1.24 million metric tons and generating USD 2.84 billion in revenue through July.

According to sector experts, the success of these exports—keeping Santa Catarina responsible for nearly a quarter of all chicken export revenue nationwide—rests on three fundamental pillars:

Impeccable Sanitary Status: The historical maintenance of zones free from mandatory notification diseases in commercial flocks.

Diversified Markets: Continuous, widespread access to highly demanding markets such as Japan, South Korea, China, the Netherlands, and Saudi Arabia.

Integration Model: The efficiency of the partnership between agro-industries and small integrated family farmers.

The Tax Shift: New ICMS Rules for Inputs

Alongside the favorable external scenario, the state's productive base and agro-industries have operated under a new tax framework since March 1, 2026.

Following intense legislative debates and adjustments promoted by Law No. 19.729/2026 and regulated by Decree No. 1.427/2026, the state implemented a deep reorganization of the Value-Added Tax on Sales and Services (ICMS) applied to agricultural inputs.

The main tax changes that took effect include:

Reduction of Inter-state Calculation Bases: New percentages applied to inputs and animal feed (60% for pesticides and general products; 30% for bran, corn, oats, and animal feed inputs).

Adjustments to Credits and Exemptions: Changes to exemption rules in domestic operations and the termination of full ICMS credit retention in certain transactions.

Deferral and Adaptations: Regulation of deferral mechanisms (such as TTD 1096) for specific operations involving fertilizers and raw materials essential to production.

Challenges and Outlook on the Production Side

Despite robust macroeconomic numbers in foreign sales, producers and agro-industries maintain close attention to cost management. Because Santa Catarina is a state with a deficit in grain production, the ongoing need to import corn and soybean meal from other regions of the country to feed livestock adds logistical and financial complexity to the chain, requiring constant monitoring of profit margins to ensure the sustainability of Santa Catarina's poultry farming in the coming months.