A lower-than-anticipated domestic corn supply is pushing prices up, putting pressure on Brazil’s pork and poultry sectors, and forcing the government to intervene, the U.S. Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) said in its latest report.
In the government’s latest attempt to provide relief to the pork and poultry producers, Brazil’s Ministry of Agriculture, Livestock, and Food Supply (MAPA) requested on Aug. 3 that the National Biosafety Technical Commission (CTNBio) allow imports of genetically modified corn from the U.S.
In the report, the FAS said Brazilian officials now fear that the country will run out of corn by 2017, due in large part to a second safrinha crop that is looking “worse and worse” as the harvest continues. Brazil has imported more than 500,000 tons of corn since January, mainly from Argentina and Paraguay, the FAS noted. Additionally, the high price of domestic corn is putting pressure on pork and poultry producers, which is impeding exports and driving prices up for consumers, the FAS said.
Prices dipped slightly as harvest began on the second safrinha crop in the Central West, but as it became evident that yields were much worse than anticipated, domestic prices rose again.
Blairo Maggi, Brazil’s Minister of Agriculture, said he is committed to meeting the requests of the industry and wants to ensure the supply of grain in the country, but only for animal feed used by breeders of poultry and pork and milk producers until December 2017.
The Brazilian government already has reduced the common external tariff (TEC) on corn imports to zero for non-Mercosur countries through November. CTNBio’s next meeting to discuss the issue will be held Sept. 1, which, if they approve the measure, would leave a window of imports from the U.S. from September-November. The pork and poultry industry is pushing to extend the reduced tariff in 2017.