Due to a drop in corn production, poultry farmers from the Brazilian state of Rio Grande do Sul plan to import corn from the U.S.
Rio Grande do Sul expects to harvest 4.6 million metric tons of corn this year – a drop of 23% compared to the previous season. The state consumes 6 million million metric tons every year, so there will be a deficit of almost 1.5 million metric tons.
With a lack of supply in Argentina due to drought and a higher cost to ship corn from the northern state of Mato Grosso, poultry producers in Rio Grande do Sul are turning to U.S. corn. The Association of Poultry Farmers of Rio Grande do Sul confirmed that the first shipment of U.S. corn, an estimated 100,000 tons, will arrive in April.
“We are already moving it to make the operation viable through our ports and terminals,” says José Eduardo dos Santos, president of the Association of Poultry Farmers of Rio Grande do Sul in a call with Agriculture.com.
For Santos, price also influenced the decision. “We had the lowest corn production in Rio Grande do Sul in almost 30 years and the prices of Mato Grosso corn are too high,” he says.
In order to import corn outside of the Mercosur bloc, Brazilians need to complete a formal request. This was already done and is under review by the country’s Ministry of Agriculture, Livestock, and Supply. The last time that a similar request was approved was in 2016.
Analyst Luiz Pacheco, a consultant who is based in Curitiba, Paraná, believes other states may follow suit, including Santa Catarina. The corn deficit in Santa Catarina is 2.5 million metric tons, which will force them to import from Argentina, Paraguay, or the U.S.
Ethanol is also contributing to the corn shortage.
“Other than cost, now there are four ethanol plants in Mato Grosso and two are being built to compete for the corn produced there,” says Pacheco.