Brazil meatpackers aren’t messing around.
High corn prices have big-time meat players, like JBS and BRF, influencing a pivot to wheat planting intentions. Brazil’s ag federation revealed data pointing to a potential 40% increase in hectares of wheat.
The reason? Wheat is the solid, affordable alternative to corn in pork and poultry feed. Other winter crops like triticale and barley are also being gobbled up in futures markets.
Desperate times call for desperate measures. Dry conditions have curbed Brazil’s corn yields, leading to a price spike. Plus, the country’s second corn crop is already being delayed, putting meatpackers in a tough predicament.
The government is turning to Paraguay and Argentina for corn, but even that’s not enough. Brazil went as far as to kick import duties to the curb due to the shortage, allowing corn imports from the United States and Ukraine.
Do the math: With U.S. corn futures at eight-year highs, it’s not like American farmers are necessarily passing out deals. One trader even noted that without import duties, trying to siphon corn from other nations still ‘doesn’t make economic sense.‘