December 4, 2019 / 4:32 PM / 6 days ago

Brazil meat-packers should organize to avoid facing corn shortages in 2020

FILE PHOTO: A man shows second corn (winter corn) near Sorriso in the Mato Grosso state, Brazil, July 26, 2017. REUTERS/Nacho Doce

BRASÍLIA (Reuters) - Demand for Brazilian corn in export markets and low inventories mean meat-packers will need to plan to avoid facing shortages early in 2020, the head of national grain grower group Aprosoja said on Wednesday.

“There could be a shortage, especially for producers of poultry and pork, if they don’t organize, if they don’t buy this corn in advance or enter futures markets,” Bartolomeu Braz, president of Aprosoja, said during an event.

With African swine fever spurring a surge of foods imports by China, Brazilian meatpackers, who are key suppliers to the Asian country, need to prepare.

Corn and soy are used by meatpackers as livestock feed, but the amount of corn available in Brazil’s center-south is poised to fall to a three-year low by May 2020.

The bulk of Brazil’s corn output is planted in the first quarter and collected around June.

This season, the second harvest of the cereal, which accounts for around 75% of total production, will be planted later due to weather issues affecting soybeans, a crop that is cultivated before the second corn every cycle.

If meatpackers fail to stock up, they risk facing shortages as corn farmers may sell their produce in export markets, Braz said.

“This corn may have other destinations, we are seeing strong demand from abroad,” he said.

Reporting by Gabriel Ponte; Writing by Ana Mano; Editing by Chizu Nomiyama and Tom Brown

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