A consortium of U.S. livestock companies, Wilmington Bulk, LLC, is seeking to slash its dependence on high-cost feed for its hogs and poultry by turning to cheaper imports, says its president. The company has raised eyebrows by buying 180,000 tons of soymeal from Brazil for distribution among its six partners, which include Murphy Brown, a unit of Smithfield Foods, Inc., the largest pork producer in the United States. "We would like to import 50% of our feed, because it will help reduce the cost of our operations," Wilmington President Jimmy Kissner told Reuters. "We have to be competitive--and basically what we are trying to do here is break even," he said, adding that feed accounts for about 70% of the total cost of operations in the hog and poultry sector. The 180,000 tons of Brazilian meal are set to arrive July through September. "It is strictly economics," said Kissner, who declined to reveal the price he paid. But Reuters reported Brazilian soymeal offering prices May 15 as $11 per short ton under Chicago's July futures, fob Paranagua. Brazil is able to offer such a cheap price because of its currency devaluation just over a year ago. And transportation costs from Brazil are not a concern, because U.S. soymeal incurs high delivery costs, due to declining soy production in the Southeastern U.S. In addition to 26,000 tons of soymeal a week, the consortium needs 130 million bushels of corn a year, and occasionally about 25 million bushels of wheat, said Kissner. He said Wilmington Bulk will be looking to import corn and wheat from countries that are more price-competitive than the United States, such as Argentina and Canada. Kissner said the consortium also is exploring the possibility of using the Wilmington, NC, harbor, which the firm has leased from state authorities, to export grains like wheat. "We are planning to export grains through Wilmington port," he said, adding that the facility is being deepened and would be able to berth Panamax-size ships of 50,000 tons. The port has five warehouses, with a capacity of 12,500 tons each, with Kissner's company planning to add another 60,000 tons of storage capacity.:
