By Ana Mano
SAO PAULO, April 23 (Reuters) – Giant Brazilian meatpackers are turning to wheat as they attempt to fend off an increase in the price of corn, the principle livestock feed ingredient, meat foyer ABPA stated.
Francisco Turra, president of ABPA’s advisory physique, instructed Reuters on Friday 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 exchange 100% of corn as feed for pork and poultry, he stated.
Citing knowledge from Rio Grande do Sul’s 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 in Brazil’s southernmost state.
“JBS and BRF have already introduced they may purchase winter crops resembling wheat, triticale and barley to make use of as livestock feed,” Turra stated. “Offers have been made within the futures market.”
JBS JBSS3.SA and BRF BRFS3.SA didn’t reply to a request for remark.
U.S. corn futures climbed to their highest in practically eight years this week pushed by worries about dry circumstances curbing corn 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, which means Brazil might import corn from nations like america 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; Enhancing by Kirsten Donovan)
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