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Brazil corn down, Milner Foods to buy Cereal Food Processors, pest resistance to GM-corn, climate change hits grains, GM crop controversy

By Nicola Cottam

- Last updated on GMT

Brazilian corn output set to fall 20%, although analysts say this shouldn't hit global supply and demand
Brazilian corn output set to fall 20%, although analysts say this shouldn't hit global supply and demand

Related tags: Maize

Brazil corn production suffers, Milner Foods to buy Cereal Food Processors, pests become resistant to GM-corn, grain production downward spiral, GM crop controversy.

Brazil’s corn output in jeopardy

Adverse weather conditions are threatening corn production in the world’s second-largest export market. Extreme dry conditions early in the season delayed planting in Brazil and subsequent heavy rainfall has slowed crop development.

The region’s second annual planting of corn – known as the ‘safrinha’ crop – accounted for 57% of total crop output last year, but current dry conditions could result in losses of up to 25% in 2014, according to analysts.

Growers in the major Mato Grosso crop growing region, which accounts for 27% of Brazil’s second corn output, planted 78% of the second crop, as opposed to 94% during the same period last year and the five-year average of 91%. This was followed by a 21% increase in rainfall, compared to the historical monthly average.

Wetter-than-average conditions also spread into the South West of Mato Grosso do Sul and the South of Goias, with each area accounting for 11% of national safrinha crop.

Macquarie Group commodities analyst, Chris Gadd said: “The planting pace in Mato Grosso has been very slow. Once you push planting into March you push pollination into May, and then you can have big issues because May is a month when they normally see very little precipitation. Yields could be all over the place.”

Overall, analysts predict a 20% fall in crop output, or 20 million tonnes, however they believe this will have little or no effect on global supply and demand.

Milner Milling on the brink of a major acquisition

Chattanooga-based milling firm, Milner Milling Company, is to acquire Cereal Food Processors to create the third largest flour milling company in the US.

Milner Milling made a bid for the company early this month and although the deal is subject to regulatory review by the US Department of Justice, officials have said the sale is likely to be ratified in April.

The acquisition will enable Milner to almost triple sales thanks to the combined output of its six flour mills and the 10 additional mills currently operated by Cereal Foods.

Milner acquired half of Pendleton Flour Mills (PFM) 11 years ago and manages the remaining PFM portfolio. With the purchase of Cereal Foods, the companies would produce 59,600 cwts (hundred weights) a day of flour.

Once the transaction is completed, the consolidated company would have flour mills in 10 US states and account for approximately 11% of total US flour sales.

Rootworm is fighting back against GM-corn

A new corn rootworm has evolved in the US that feeds upon the GM crop designed to destroy it.

The so-called Bt corn was hailed a huge biotech success when it came onto the market in 1996 and has saved farmers billions of dollars in damaged crops each year. However, a combination of mismanagement by farmers, corporations and lawmakers has diminished the crop’s efficacy and farmers will have to revert back to pesticides to fight the calamitous onslaught – undermining all the environmental benefits of using GM corn in the process.

Farmers were warned that overusing Bt corn would allow rootworm to build a resistance to its toxin and scientists therefore recommended a minimum 50/50 split between GM corn versus non-GM corn per farm, but many farmers chose to ignore this advice.

The first new case of corn rootworm was reported back in 2009 in North Eastern Iowa, however it has since spread to Illinois, Minnesota, Nebraska and South Dakota.

Grain production could tumble 2% per decade

Global warming is likely to severely hit world production of wheat, corn and rice, according to a draft report released by the UN Intergovernmental Panel this week at the Climate Change’s Working Group II session in Japan.

The report emphasises the need to shift cultivation periods in order to adapt and develop crops with greater resistance to high temperatures.

Increased drought as a result of fluctuating rainfall will reduce global grain output by up to 2% per decade, said the report, while demand from a growing population will increase by 14%. Poor communities in tropical regions will suffer the most.

Estimates suggest the global population with reach 9.2 billion by 2050 and in order to support growing demand agricultural crops and other food production will have to be increase by 55% compared to the 2000 level.

Akio Shibata, president of Tokyo-based Natural Resource Research Institute, said: “Global warming has been a cause of the steep rise in food prices, as well as increasing demand for food in China. If the situation remains unchanged, countries will have to scramble for food in the future. We should hurry to increase global food production by disseminating Japan’s advanced agricultural technologies around the world, for example.”

GM crops continue to breed discontent

Controversy continues to plague the biotech industry as China this week turned away a further 21,800 tonnes of US corn after detecting an unapproved genetically modified strain in the batch, meaning China has rejected a total 908,800 tonnes of corn shipments from the US since last November.

According to China’s official Xinhua news agency the corn was disallowed because shipments contained traces of Syngenta’s MIR 162 GM corn, which is not approved for import by the country’s agriculture ministry.

Meanwhile in the US Monsanto, is embroiled in an ongoing dispute with farmers over the unauthorised release of biotech wheat that was never deregulated by the USDA.

US farmers are accusing Monsanto of contaminating non-GM wheat during field trials of its GM variety last year and are claiming compensation following the subsequent suspension of soft white wheat exports to Japan and Korea.

An initial mediation session is set for April 11.

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