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June 6, 2016

Poultry Producers in Parana lose Birds due to lack of Corn

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Poultry producers in Parana in southern Brazil continue to lose thousands of chickens to starvation due to problems in obtaining feed for their flocks. Late last week, it was reported that one producer lost 12,000 birds that were 13 days old because of a lack of feed. He was a contract-grower for a processor and the processor couldn't buy corn to manufacture the feed. At another farm in western Parana they lost 10,000 birds before the producer sold the remaining birds to the processor at reduced weights. According to the Association of Poultry Producers in Western Parana, 30 producers have already reported similar problems. It is a sad situation and no one can ever recall anything similar to this happening in Brazil.

As I have been reporting for several weeks, in parts of southern Brazil, there is not any corn to purchase at any price! Feed manufactures are desperate for corn and some have gone to Paraguay and Argentina looking for corn with one manufacturer, who needs 250 tons of corn per day, even advertising on the local radio stations looking for farmers that might still have some corn to sell. At this time of the year, feed manufactures like to have a 90-day supply of corn on hand while they wait for the safrinha harvest to start. Many are now reporting that they have less than a 30 supply on hand and obviously they are very anxious for the safrinha corn harvest to get under way.

As you can imaging, corn prices have responded to the tight supplies. In April of last year, corn in western Parana was selling for R$ 20.87 per sack ($3.15 per bushel). In April of this year, the corn was selling in western Parana for R$ 37.18 per sack ($4.82 per bushel) and it is now selling for R$40.00 per sack ($5.20 per bushels). Parana is a big corn producer, which has helped to mitigate the price increases. In northeastern Brazil where there is always a corn deficit and it cost a lot to transport corn to the region, current corn prices are over $7.00 per bushel.

The whole corn shortage in Brazil should start to ease as farmers begin to harvest the safrinha corn crop. Thus far, only a few percent of the crop has been harvested, but the harvest pace will now accelerate moving into June.