By Lisa Baertlein
Aug 6 Tyson Foods Inc, the biggest U.S.
meat producer, said on Monday that it has not ruled out buying
Brazilian corn due to a drought devastating the crop in the
United States, but added that its current domestic supply cost
less than imports.
"We run the math constantly and when it works that's an
avenue for us," said Donnie Smith, president and chief executive
officer of Tyson Foods on a conference call with analysts.
"We've got a lot of truck corn bought from local farmers ...
the imported values out of Brazil wouldn't compete with the
costs that we've got," he said after the company announced its
Pork processor Smithfield Foods and poultry producer
Pilgrim's Pride, a unit of Brazil's JBS, already have
said they are importing corn from Brazil as the worst U.S.
drought in half a century has sent domestic corn prices through
the roof and made imports more attractive.
Tyson raises its own chickens while buying cattle and hogs
to be processed into beef and pork.
The U.S. corn crop has been shrinking amid the expanding
drought, with the U.S. Department of Agriculture in July cutting
the size of the crop by 12 percent to 12.970 billion bushels.
Analysts are expecting the department to cut its estimate
further in a supply-demand report due on Friday.
Corn prices at the Chicago Board of Trade have soared more
than 50 percent over the past two months, hitting a record high
$8.28-3/4 a bushel on July 20, causing cattle ranchers and hog
farmers to liquidate their herds as feed costs surge.
These producers have also been affected by the drought
scorching pasture and lifting prices for hay.
Farmers in the South have begun harvesting their corn, with
anecdotal accounts showing better-than-expected yields in states
like Mississippi and Arkansas that were spared by the drought.
But about 75 percent of the U.S. corn and soybean crops are
grown in the Midwest, where the drought spanning more than
two-thirds of the contiguous United States is centered.