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April 2, 2013

Fertilizer Sales in Mato Grosso Increase Less than Seed or Chemical

The logistical problems in Brazil are not only impacting the movement of grain within Brazil, it has also impacted the transportation of fertilizers as well. According to the National Association of Fertilizer Distributors (Anda), farmers in Mato Grosso increased their soybean acreage by 900,000 hectares in 2012/13, but fertilizer sales increased less than seed or chemical sales due to logistical problems getting the fertilizers from the ports to the interior of Brazil.

Most of the new soybean acreage was the result of the conversion of pastureland to new soybean production. These areas by their very nature required increased applications of fertilizers to raise the soil fertility compared to areas of continuous soybean production. Some farmers reported that they did not receive their complete shipment of fertilizers at the time of planting and as a result, their crop may have been under fertilized. This may have been one of the contributing factors to the somewhat disappointing soybean yields registered in parts of Mato Grosso this growing season.

During the first two months of 2013, fertilizer delivers in Mato Grosso were up 8%, but seed and fertilizer sales were up 10%.

Seventy percent of the fertilizers utilized in Brazil are imported and most of the fertilizers enter Brazil through the Port of Paranagua in southern Brazil. The peak of the fertilizer imports occurs between July and September, but a work slowdown at that time by federal port inspectors delayed the unloading of the fertilizer. After being unloaded, a shortage of trucks to transport the fertilizers to Mato Grosso delayed the delivery even more.

The first arrival of fertilizer shipments at the Port of Paranagua is still several months away, but the chaotic logistical situation at the port have many farmers worried if they will get their fertilizers on time for the 2013/14 planting season, which will start in September. Brazil has a record large soybean crop and a potentially record large corn crop as well to export and delays at the port are already much worse than last year.

Additionally, the new truck driver law that mandates longer rest periods for drivers has effectively reduced the number of trucks on Brazilian highways by at least 20%. If there was a shortage of trucks last year, the situation could be much worse for fertilizer delivers later this year.