April 30, 2013

Lack of Storage in Brazil Leads to Increased use of Silo Bags

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Farmers in Mato Grosso do Sul are very concerned about the potential lack of storage space for their safrinha corn crop. Much of their concern is focused on the fact that they still have their full-season corn and soybeans occupying storage space and they have a potentially record large safrinha crop yet to harvest.

The safrinha corn crop in Mato Grosso do Sul is estimated at 6.2 million tons, but much of the full-season corn production is still in storage in the state. Most of Mato Grosso do Sul's exported soybeans leave the country through the Port of Paranagua, but wet weather during the month of March resulted in less soybeans being exported than originally anticipated. The weather at the port during April has been much dryer and producers are hoping that the export pace will accelerate before space is needed for the safrinha corn which will be harvested starting in June.

One temporary solution to this dilemma is the utilization of more silo bags. These horizontal plastic storage bags come in several sizes from 1.8 to 3.6 meters in diameter and 30, 60, or 90 meters long. The size most commonly used in Brazil is 1.8 meters in diameter and 60 meters long. These heavy plastic bags can be used just one-time and they are not designed for more than temporary storage. Mato Grosso do Sul has 851 registered grain storage units, but just like in the rest of country, there is not enough storage space in the state to store all the crops at the same time.

The Cooperoeste cooperative in Sao Gabriel do Oeste in northern Mato Grosso do Sul is a typical example of this chronic problem. Its members are responsible for 65,000 hectares of grain production and the cooperative has enough storage for 1.25 million sacks of grain. The problem is that they still have 800,000 sacks of soybeans in storage. Their membership is expected to harvest 1.5 million sacks of corn, so they may be short 400,000 sacks of storage if they don't move more of their soybeans before the safrinha corn harvest begins in June.