Following one of the worst droughts in U.S. history in 2012, U.S. imports of corn from Brazil can still be seen as late as August and September of this year, while this year’s harvest is slow to fill the gap between supply and demand.
As previously reported by Reuters, rumors of the rare imports of this U.S. staple began surfacing last July as domestic corn prices soared. By late September deals had been confirmed by several large livestock companies calling for a series of bulk shipments from Brazil in subsequent months. Despite initial estimates on how much Brazilian corn would be needed, PIERS data shows bulk shipments of corn to major chicken producers like Pilgrim’s Pride Corp as late as August 30th, and other bulk shipments destined for Panamerican Grain in Puerto Rico arriving in early October. Prior to 2012, bulk U.S. imports of corn were rare, if ever, and usually came from Canada.
In what should be a reminder that global trade is ever-changing and often unpredictable, PIERS data shows that the U.S. has imported nearly 725,000 metric tons of corn from Brazil since the beginning of the 2012 drought through September 30, 2013. And while Brazil stuck out as the primary beneficiary of the U.S. supply shortage, there was also an additional 185,000 metric tons of corn imported from Brazil’s South American neighbor Argentina.
According to Reuters, John Prestage of Prestage Farms stated that prices could be as much as 5% lower to import corn from Brazil than to transport it from the Midwest. He noted his increasing interest in possibly importing other grains beside corn in the future.
So far things are looking up for this year’s harvest. The U.S. remains the world’s largest producer of corn and favorable weather conditions have estimated the U.S. harvest will jump 30% over last year, putting them at record levels, which could give U.S. corn exports a price advantage over global competitors.
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