Smithfield Foods to import corn from Brazil
As drought pushes U.S. corn prices into record territory, Smithfield Foods will import corn from Brazil, a company spokeswoman confirmed.
There have been no volume figures shared by the Virginia-based company or when exactly the first shipment will arrive.
Analysts say while it is unusual for U.S.-based livestock producers to import South American feed supplies, it could right now be less expensive to do so than buy corn grown in the Midwestern states.
The Smithfield decision comes amidst the worst drought in decades in the U.S. Corn Belt which has pushed corn futures prices over $8.00 per bushel for September delivery.
Unlike small hog producers who might also grow their own corn, large producers like Smithfield must purchase massive amounts of corn and soybean meal to feed its hogs.
Paulo Molinari, consultant at Brazil-based Safras e Mercado, told Marketwatch.com that corn at Brazilian port cities is currently at about $290 per metric ton, compared with $345 at the U.S. Gulf of Mexico. Shipping corn to the U.S. from Brazil adds around $30 to $40 per ton.
“There’s never been this big of a difference in price,” Molinari affirmed. “Brazilian corn is almost always at the same level as in the Gulf of Mexico, if not higher.”
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