Production:

Corn is the second most important annual crop next to wheat in Chile. Chile's corn-belt extends from Rancagua (Region V) to Los Angeles (Region VIII). Most corn producers are considered small scale subsistence farms, as only 10 percent of them plant areas over 30 hectares (ha) of corn each year. Most of these "large producers'" plant the same fields year after year and obtain yields as high as 16 metric tons (MT) per ha. Chile's average yield for corn production tends to exceed 13 MT per hectare, which is considered one of the highest in the world for a country's annual average yield. Most corn is planted under flood irrigation.

Farmers base their crop decisions on expected profits that depend on many factors that they cannot influence. Such factors include yields, domestic and international prices, weather and alternative crops, which are especially important for a large scale. Additionally prices and imports of substitutes for corn like sorghum and balanced animal feed used in the chicken and pork industry have also an important role in supply and demand of corn in Chile.

According to the last figures released by the Ministry of Agriculture (MOA) the total planted area and production estimates for MY2014/15 increased when compared to the previous year, because farmers who normally planted corn for seeds planted commercial corn as the demand for seeds fell drastically worldwide during CY 2014. In addition, seed suppliers report that high corn seed stocks in the United States have caused them to drastically reduce production and exports. Moreover, due to attractive prices paid for domestic corn in CY 2014 farmers increased the planted area for commercial corn, which offset the reduction in the planted area for corn seeds that year.

For the outer year, MY2015/16 plantings of commercial corn are expected to fall as prices paid for the present harvest have been lower than what was initially expected by producers. Corn farmers told FAS that the increasing costs of production due to a devaluation of the peso have increased their expenditures for energy, fertilizer and transportation. As a result, some farmers are looking at alternative crops like fresh fruits as a possibility for their future planting, to take advantage of higher profits paid for that product. However the transition costs associated with converting a traditional corn farm to an orchard is tremendous. Thus, the likelihood is uncertain, as it would take a financial investment, as well as time to convert and generate a product suitable for export.

Consumption:

Consumption and Trade

Corn is the most important ingredient for animal feed ingredients in Chile, which is used primarily for the poultry and pork industries. Significant volumes of yellow corn is imported for animal feed as farmers only produce an equivalent of less than 50 percent of total consumption every year. In the past, consumption of corn has grown more or less at the same rate as the increase in production of poultry and pork. But it started to fall some years ago, mainly due to an increase in the use of alternative feeds. Alternative feed is imported if there is a significant difference in import costs of products like sorghum, broken kernel corn and balanced feed as was indicated by industry sources. Sorghum is imported mainly from Argentina. At present the price of corn is competitive to sorghum and alternative feeds available, thus farmers are using corn for feed at this time.

Consumption of corn is expected to remain the same as the biggest consumer, the poultry and pork industries have no plans in the short term to increase production. Post met with the largest pork and poultry producer in Chile who said that overall production level of the industry are near capacity and no new projects exist for expanding. As an example, in the case of pork production, the largest Chilean producer recently closed a production site, as they fell into unresolvable environmental problems. The closing of that operation cost them millions of dollars in losses during last year. Both, pork and poultry industry have been reluctant to expand and develop new projects as environmentalists are becoming more powerful and are opposing such expansions. In addition, the Chilean Government has strict guidelines to enforce and regulate the sizes of these and other similar industries.

Pork and poultry meat per capita consumption are already high in Chile. Over 37 kilo grams (kgs) of poultry and 27 kgs of pork are consumed per capita each year.

In MY2014/15, as a result of an expected increase in production due to anticipated increases in planted area, imports are expected to be smaller than the previous marketing year. For MY2015/16 as production is expected to be significantly smaller, larger imports are expected to maintain Chile's consumption needs, as no increases in demand, in the short term, are expected from the pork and poultry industries, who are the major consumers of corn in Chile.

Within the international suppliers of corn in CY2014, Paraguay was the leading supplier again with 63 percent of imports, replacing Argentina which was the main supplier for a long time.

Production, Supply and Demand Data Statistics:

Corn

2013/2014

2014/2015

2015/2016

Market Begin Year

Mar 2013

Mar 2014

Mar 2015

Chile

USDA Official

New post

USDA Official

New post

USDA Official

New post

Area Harvested

117

117

130

125

0

115

Beginning Stocks

320

320

306

379

0

336

Production

1,186

1,186

1,400

1,262

0

1,160

MY Imports

1,500

1,571

1,300

1,350

0

1,500

TY Imports

1,456

1,453

1,300

1,100

0

1,000

TY Imp. from U.S.

222

13

0

50

0

100

Total Supply

3,006

3,077

3,006

2,991

0

2,996

MY Exports

75

73

100

30

0

30

TY Exports

74

74

100

30

0

30

Feed and Residual

2,300

2,300

2,300

2,300

0

2,300

FSI Consumption

325

325

325

325

0

325

Total Consumption

2,625

2,625

2,625

2,625

0

2,625

Ending Stocks

306

379

281

336

0

341

Total Distribution

3,006

3,077

3,006

2,991

0

2,996

1000 HA, 1000 MT, MT/HA

Import Trade Matrix

Country

Chile

Commodity

Corn

Time Period

Jan-Dec

Units:

M.T.

Imports for:

2013

2014

U.S.

141

U.S.

13,015

Others

Others

Paraguay

751,973

Paraguay

884,593

Argentina

257,093

Argentina

511,241

Brazil

74,958

Bolivia

1,354

Bolivia

8,548

Peru

109

Peru

158

Colombia

20

Total of Others

1,092,730

1,397,317

Others not Listed

31

-

Grand Total

1,092,902

1,410,332