By Ana Mano
SAO PAULO, April 23 (Reuters) – Massive Brazilian meatpackers are turning to wheat as they attempt to fend off an increase in the price of corn, the primary livestock feed ingredient, meat foyer ABPA stated on Friday.
Francisco Turra, president of ABPA’s advisory physique, informed Reuters that demand from meat processors, who present feed to the farmers who elevate the livestock, is driving an increase in wheat planting intentions in his native Rio Grande do Sul state.
Wheat can totally substitute corn as feed for pork and poultry, he stated.
Citing information from the state agriculture federation Farsul, Turra stated the world to be planted with wheat and different winter crops in 2021, beginning subsequent month, could develop from 1 million hectares (2.four million acres) to 1.four million hectares.
Meatpacking giants JBS JBSS3.SAand BRF BRFS3.SA have stated they are going to purchase winter crops reminiscent of wheat, triticale and barley to make use of as livestock feed, Turra stated.
“Offers have been made within the futures market,” he added.
BRF stated it’s “all the time on the lookout for the very best options that assure provide and competitiveness.” JBS declined to remark.
U.S. corn futures climbed to their highest in almost eight years this week, pushed by worries about dry situations curbing yields in Brazil and chilly climate slowing germination of the 2021 U.S. crop.
Excessive costs and delays in Brazil’s second corn crop have pressured meatpackers’ margins, main some firms to show to Paraguay and Argentina for provides.
This week, the federal government waived import duties on soy and corn from nations exterior the South American Mercosur commerce bloc, that means Brazil may import corn from nations like the USA and Ukraine.
Nonetheless, with “import parity” above $30 per tonne, shopping for corn from exterior Mercosur nonetheless doesn’t make financial sense, a dealer stated.
Utilizing wheat as livestock feed is widespread in Canada and Russia, which do not produce corn nor import it, stated Turra, who served as Brazil’s Agriculture Minister between 1998 and 1999.
(Reporting by Ana Mano; Modifying by Kirsten Donovan and Jane Wardell)
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