Even though Brazil will be importing corn this year, it is still exporting corn and other ag exports in record amounts. But after feeling the effect of a corn shortage from last year’s drought, Brazil’s BRF SA is making forward purchases of corn. And corn production is down in the country’s largest corn-producing state.
Brazilian processed foods maker BRF SA, the world’s largest poultry exporter, is making forward purchases of corn, the main ingredient in animal feed, Reuters reported.
Brazil, which is usually a corn exporter, expects to import 1.5 million tons of the grain in 2016, according to government crop supply agency Conab.
Record corn exports in 2015, combined with drought early in the year, drained the country's corn supplies and sent Brazilian pork and poultry producers into a crisis.
The company is trying “to lock in strategic inventories and … position ourselves for what I'm calling a normalization of the grains market, both in Brazil and Argentina," BRF CEO Pedro Faria says.
Meantime, the Mato Grosso Institute of Agricultural Economics lowered its estimate of the state’s crop once again, according to the Soybean and Corn Advisor newsletter. The state of Mato Grosso’s safrinha corn yield is now estimated at 68.3 bu. per acre, which is down 27.8% compared to last year.
In the state’s northeastern region, corn yields fell 62% to 36 bu per acre, according to the newsletter. The safrinha corn crop in the state is planted from January to early March and harvested from June through August. Mato Grosso is the largest safrinha corn-producing state in Brazil.
Also, Brazil’s ag exports reached a record so far this year, increasing by by 25%, compared to the same period in 2015, according to Cepea, a research center of the University of São Paulo. The revenue generated by exports reached 45 billion USD, a 4% increase.
According to Cepea, exports included corn and ethanol, which rose by 131.1% and 100.9%, respectively. Soybean exports rose by 19.6%.