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Ranchers in southern Brazil seek alternatives to reduce corn costs

Beef cattle ranchers in southern Brazil are looking for alternatives to lower corn costs. The price of the grain has risen by over 50% in six months, and the average cost is now R$ 47.00 per bag in the state. Until the winter corn crop has been harvested to alleviate the shortage of the product, farmers are considering importing grain from Argentina and Paraguay.

In September 2015, when the price of corn began to increase, the cost of feed accompanied the rise. In this scenario, milk producers had to lower costs. Paul Sulzbach is one example. He used to pay practically the same as what he was paid for a liter of milk for a kilo of feed: around R$ 1.10. The solution was to buy a silo to store corn meal. He saved R$ 3,000 a month.

Independent hog farmers have also felt the squeeze. The president of the Rio Grande do Sul Hog Breeders Association (ACSURS) says the problem is the shortage of corn on the domestic market. In addition, grain exports in the first three months of 2016 totaled over 12 million tons, which contributed to the low supply of the product for Brazilian ranchers.

"The availability of corn in the hands of farmers is very low. Corn today is either deposited in cooperatives or purchased by consumers, such as integrated poultry and pork farmers. The large volume of exports is accounting for much of the corn harvested in Rio Grande do Sul," says the association's president, Valdecir Folador.

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