Brazil Allows U.S. Corn Imports, Current Prices are Prohibitive

Hog and poultry producers in southern Brazil have been experiencing negative profit margins in recent months due to record high corn prices. Some of the larger livestock producers have already started to import corn from Paraguay and Argentina in order to keep their operations up and running. They have also petitioned the government to allow GMO corn from the United States to be imported into Brazil.

In response, the Brazilian government recently announced that the National Biosecurity Technical Commission (CTNBio) has approved the importation of GMO corn from the United States into Brazil.

Whether Brazil imports U.S. corn or not will ultimately depend on prices. According to Marcos Araujo, an analysts from Agrinvest, if corn was imported from the U.S. today, it would arrive in the city of Chapeco in western Santa Catarina costing about R$ 105.49 per sack (approximately $9.40 per bushel). Corn imported from Argentina would arrive at the same location costing about R$ 86.24 per sack (approximately $7.68 per bushel). The local price for corn in Chapeco is currently R$ 81.00 per sack (approximately $7.21 per bushel).

Chapeco is the center of Brazil’s hog production and corn from the U.S. would have to be trucked from the ports to the interior of Santa Catarina. At current prices, importing corn from the U.S. into southern Brazil would not be a viable option. It might be a viable option if the corn was imported into northeastern Brazil, but the demand for corn in that region of Brazil is quite small.

In contrast, corn imported from neighboring Argentina could simply be trucked a few hundred kilometers across the border into western Santa Catarina.

Additionally, Brazilian farmers are starting to harvest their safrinha corn, which accounts for three quarters of Brazil’s total corn production. Harvest pressure over the next few months could drive domestic corn prices lower making U.S. imports even less viable.

Tags: Brazil, US, импорт, corn