More Talk of Corn Shortages in Brazil

Posted on Wed, 12/04/2019 - 12:14

Demand for Brazilian corn is strong this year, from the export, ethanol and livestock front, which has the grain grower group Aprosoja warning Brazilian meat packers they will need to plan ahead if they want to avoid corn shortages early next year. “There could be a shortage, especially for producers of poultry and pork, if they don't organize, if they don't buy this corn in advance or enter futures markets,” Bartolomeu Braz, president of Aprosoja, said this week.

An outbreak of African swine fever in China and other Asian nations has resulted in strong demand for animal protein, propping up Brazil’s exports. This has helped to push live cattle prices to record levels, equating to strong feed demand for corn.

Livestock-heavy areas of Brazil like Santa Catarina are located quite some distance away from the primary corn-producing regions of Brazil. Therefore, the state of Santa Catarina recently reached an agreement with Paraguay and Argentina to import corn from both countries, reports South American Crop Consultant Dr. Michael Cordonnier. The province is expected to face a corn deficit of 4.5 MMT in 2020. “The biggest impact from the corn deficit is expected to be on small and independent livestock producers who have less wherewithal to withstand higher feed costs,” notes Cordonnier.

He adds that northeast Brazil could also face corn deficits, which could lead to some imports of the grain from the United States. That could be a more affordable option than shipping in corn from more central areas of the country.