A report from the US Department of Agriculture’s (USDA) Foreign Agriculture Service (FAS) in Brazil said the Ministry of Agriculture, Livestock, and Food Supply (MAPA) is expected to request the National Biosafety Technical Commission (CTNBio) to approve the import of genetically engineered corn from the US.
The move is the most recent step by the government to help relieve pork and poultry producers faced with high feed costs, said the UDSA. The US has about 13 biotech strains approved for use that have not been authorized for use in Brazil.
“The second ‘safrinha’ crop is looking worse and worse as the harvest continues and there are fears that Brazil will run out of corn by 2017,” the department said.
The “safrinha” is Brazil’s second corn crop of the year, often following a soybean harvest, said the department. It is harvested late in the regional marketing year with exports running from September to January.
The crop has expanded in recent years and may account for more than 65% of the total corn crop, the department said.
Situation details
Since January, the country has already brought in about 500,000 metric tons of corn, sourcing predominantly from Argentina and Paraguay, the department said.
“The high price of domestic corn is putting a lot pressure on pork and poultry producers, which is impeding exports and driving prices up for consumers,” said the USDA. “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.”
Poultry output has been reduced by 10% since March, and; monthly meat production had been reduced by about 225,000 tons, the department said.
The Minister of Agriculture, Blairo Maggi stated earlier this month that he wants to guarantee a grain supply for Brazil and meet industry needs, the department said. However, the import request would only apply to corn used in animal feed for the producers of poultry, pork and in the dairy industry through December of 2017.
“The government has already reduced the TEC [import tax] on corn imports to zero for non-Mercosul countries through November,” the department said. “CTNBio’s next meeting to discuss the issue will be held September 1, which, if they approve the measure (there is a lot of political pressure to do so), would leave a window of imports from the United States from Sept-Nov.”
Additionally, pork and poultry producers are asking for the reduced tariff to be carried into 2017, it added.
Feed numbers
Corn production for 2015/16 is estimated at about 75m metric tons, said the USDA in an earlier report. The amount marks a drop of about 12% and is the result of poor weather conditions limiting the second “safrinha” crop.
Strong corn exports along with the poor weather have tightened domestic supplies, the department said. “Minimum poultry and pork production costs, which encompass primarily feed and energy expenses, increased on average by 50% in the first half of 2016,” it added.
“There have been media reports that some producers are feeding their pigs and chickens milling-quality wheat because they are unable to find any corn or feed wheat on the domestic market,” the department said. However, first crop corn, which could start planting in September, may have to compete with land for soybean production if the prices for soy stay high.
2015/16 corn stocks are estimated to be 4.3m metric tons with about 891,000 metric tons in public stocks, the department said. It is the tightest supplies have been since 2011/12.