August 12, 2011

Canola Production Slowly Carving out Niche in Southern Brazil

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

After a series of freezing temperatures severely impacted the safrinha corn crop and the wheat crop in southern Brazil, farmers in southern Brazil continue to look for alternative crops to grow during the "winter" season. The "winter" crop production in Brazil is dominated by safrinha corn and wheat, but as farmers learn more about how to successfully grow canola, the crop is starting to carve out a growing niche in southern Brazil.

The state of Rio Grande do Sul is the leading canola producing state in Brazil followed by Parana. Farmers in Rio Grande do Sul planted 31,000 hectares of canola which represented a 27% increase over last year. In Parana, farmers planted 15,000 hectares of canola compared to 13,000 last year. Total canola production in Brazil is expected to be 69,000 tons, which is minuscule compared to the major crops grown in Brazil, but it is growing and expected to grow even further.

Canola production in 2011 is not as good as expected due to cold weather and extended periods of cloudiness in southern Brazil. Parts of northern Rio Grande do Sul, where the canola is grown, has received over four inches of rainfall thus far in August and more is expected over the next ten days. They have already received 80% of their normal August rainfall and the humid conditions have also spurred diseases such as white mold, which is a serious disease for canola in Brazil.

The impetus behind increased canola production is the fact that Brazilian food manufactures are currently importing canola oil for the food products and they would like to see more domestically produced oil. Additionally, the canola oil will be used to manufacture biodiesel in Brazil. Currently, 80% of the vegetable oil used in Brazilian biodiesel production is soybeans oil, which is the amount limited by legislation. Biodiesel manufactures are trying to source alternative oils, but has been difficult. Canola oil could well up being one of those alternatives.