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April 17, 2014

Mato Grosso and Sao Paulo are two Main Ag States in Brazil

The states of Mato Grosso and Sao Paulo have been trading places in recent years as the number one and number two agricultural states in Brazil. Their positions change year-to-year depending on production levels and prices. For crop production along, Mato Grosso is in first place once again, but if you combine both crops and livestock production, Sao Paulo is in first place this year.

The Minister of Agriculture looks at twenty different crops and the livestock sector on a monthly basis and calculates the gross receipts for each commodity. The calculation is made based on the volume produced and the average price during the month. For the 2013/14 growing season thus far, Mato Grosso is number one in gross receipts for crop production, but Sao Paulo is number one when livestock and crops are combined.

The gross receipts for crop sales in Mato Grosso are expected to be R$ 44.73 billion in 2013/14, which would represent an increase of 6.2% over the previous year. In the state, nearly 100% of the income is from five crops: soybeans, cotton, corn, sugarcane, and rice. During the current growing season, receipts for soybeans, cotton, and rice are expected to increase and receipts from corn and sugarcane are expected to decline.

The growth leaders in sales receipts in Mato Grosso are soybeans and cotton, which increased 10% and 25% respectively over last season. Farmers in the state expanded the acreage of both crops and the weather has generally cooperated for good crop yields. Corn acreage declined in the state and the total corn production is expected to be down about 6 million tons compared to the 22 million tons of corn produced last growing season.

In the state of Sao Paulo the receipts from crops is expected to be R$ 43.66 billion, which is down 3% from the previous year. In the state of Sao Paulo the crop mix is very different compared to Mato Grosso. In addition to the traditional crops such as soybeans and corn, Sao Paulo is by far the largest producer of sugarcane in Brazil responsible for nearly 60% of Brazil's total sugarcane production. In addition, most of Brazil's oranges are produced in the state along with some coffee.

Unfortunately, the weather in Sao Paulo was very unfavorable during the most recent growing season. Record high temperatures and a lack of rainfall during December and January resulted in significantly reduced crop yields all across the state.

When livestock production is combined with crop production, Sao Paulo comes out the leader this growing season. The state of Sao Paulo has a lot of cattle on grass as well as a significant number of cattle in feedlots. In addition, the state has significant poultry and hog production as well. The primary livestock produced in Mato Grosso is cattle and the state has the largest cattle herd of any state in Brazil. Most of the cattle in the state are grass fed (approximately 90%), but the number of cattle on feed (approximately 10 %) has been increasing in recent years. A limited amount of poultry and hogs are also produced in the state as well.

Nationwide, the crop receipts are expected to total R$ 293 billion this growing season, which would represent an increase of 3% compared to the last growing season.