During Drought, the U.S. Imports Brazilian Corn
Experiencing one of the worst droughts in half a century, the United States experienced a shortfall with corn crops this year. In July, some U.S.-based meat companies began importing Brazilian corn for animal feed. AS/COA Online explores how the U.S. drought is affecting Brazil's corn and soy producers:
In recent weeks, U.S. corn prices spiked as the drought affected 88 percent of the country’s corn crops. As a result, some U.S. meat producers chose to buy Brazilian corn by paying $12 per ton less than U.S. corn, which costs a whopping $324 per ton. The corn price increase couldn’t come at a better time for Brazil. Given increased capital flows and improved fertilizers, Brazil is enjoying a record corn harvest, estimated at 70 million tons. Fourteen of those tons will be exported to the United States. "It's out of the ordinary, but it has happened before. It's just emblematic of how these high (U.S. corn) prices are rationing demand," commodities analyst Rich Feltes told Reuters.