July 2, 2008

High corn prices will have Brazilian farmers increasing planted area of corn in the 2008-09 season, said the Chicken Exporters and Producers Association, ABEF, on Tuesday (July 1, 2008).

Brazil's massive chicken-meat processing companies have been expressing concern over high corn prices cutting into profit margins. Tight supply in the local market had major chicken producers competing with exporters to keep corn local,.

An estimated 75 percent of the cost of chicken production is based on the cost of corn.

A frost in the main winter corn producer states is likely to take around 1.9 million tonnes of corn out of the total crop, estimated to be around 53.4 million tonnes, the Agricultural Studies Center of the Getulio Vargas Foundation, a private business school, said Tuesday (July 1, 2008).

ABEF president Francisco Turra said that the industry was no longer worried about supply constraints.

"There's been a reduction in exports and that's guaranteed a return to normalcy," Turra said in a press release.

However, a recent report indicated that damaging frost in south Brazil would take 1.9 million tonnes out of an originally estimated national corn crop of 53.4 million tonnes.