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Poor Brazil Corn Harvest May Open Door for U.S. Exports

WASHINGTON, Aug. 10, 2016 - Brazil’s Ministry of Agriculture, desperate to open up new feed supplies for the livestock industry, is asking the country’s biotech regulatory agency to temporarily lift restrictions on corn imports from the U.S., according to USDA’s Foreign Agriculture Service.

Brazil's second yearly corn crop, the safrinha, “is looking worse and worse as the harvest continues and there are fears that Brazil will run out of corn by 2017,” FAS said in a report released today. Export demand has also reduced domestic supplies.

As a result, the Brazilian Agriculture Ministry last week went to the country’s National Biosafety Technical Commission (CTNBio) - an independent agency responsible for GMO approvals - and officially requested that imports of U.S. corn be allowed from September through November, FAS said in the report.

The CTNBio is scheduled to meet on Sept. 1 to decide on allowing U.S. corn imports and there is a lot of political pressure on the agency to do so, FAS said.

Here in the U.S., corn farmers would welcome any new business, said Tom Sleight, CEO of the U.S. Grains Council. U.S. exports are already strong this year, he added, but so is production and that has kept prices low.

Brazil’s prohibition of U.S. corn hasn’t been much of an issue, Sleight said, because the country normally does not need to import corn and often competes with U.S. exports.

In a separate report released in June,  FAS said Brazil’s production has suffered from drought. In addition, the country’s weak currency is driving farmers to sell more of their corn than normal overseas. The report said Brazil’s corn exports were already up 138% from the same period in 2015.

The different factors had pushed domestic corn prices to record highs and resulted in Brazilian pork and poultry producers cutting production. As of the June report, chicken production was down 10%, and pork producers reduced insemination rates by 15%.

“Plants across Brazil responded to the increased input costs by cutting work shifts, enforcing mandatory vacation for employees, shutting down operations, and even prematurely slaughtering animals they are unable to continue feeding,” the June FAS report said.

Written by Bill Tomson for Agri-Pulse Communications.

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