Carolina Gonçalves      Reporter Agência Brasil

Brasília – Suffice it to say that while the government’s minimum price for a sack of corn is R$13.20, and R$22.87 for a sack of soybean, market prices are R$35 and R$85, respectively. The minimum price is a market reference for what the government will guarantee Brazilian farmers.

In the United States, corn and soy are used to feed cattle, pork and poultry. In Brazil most cattle are range free, so the pressure resulting from higher grain prices is more on pork and poultry.

Behind the rise in grain prices is what has been called the worse drought in the US in 50 years. In southern Brazil, where it is not common, and in the Northeast, where it is part of life, there have been harsh droughts as well.

The Ministry of Agriculture reports that it has stockpiles of 1.2 million tons of corn and that part of its reserves can be put on the market, especially in the South and Northeast, at subsidized prices. However, the National Supply Company (“Conab”), which handles shipping, says it is having distribution problems.

Edilson Guimarães, at the Ministry of Agriculture, reports that 30,000 tons of corn were released on August 30, of which 18,000 went to the Northeast and North regions. Another 30,000 tons will go to market this week, he confirmed, with some of it going to the Southern region (Santa Catarina and Rio Grande do Sul).

Guimarães says the government knows it cannot balance market supply and demand. Brazilian government stockpiles, he points out, are small change in light of the historical grain harvest shortfall of around 130 million tons in the US.

 On the other hand, Arnaldo Figueiredo, a farmer/cattleman, told Agênca Brasil that the present crisis could be a strategic opportunity. “This is a global crisis that could benefit Brazilian cattle ranchers who work with dairy and beef cows that do not depend on corn and soy-based animal feed.”

But Figueiredo complains that meat packers have made exports their priority. “Of course,” he declared, “the idea is to take advantage of the demand in the United States. But that idea is not good for our domestic market.”

Allen Bennett – translator/editor The News in English

Link - Custo do milho no Brasil e no exterior pressiona mercado de carnes