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August 18, 2011

Farmers in Rio Grande do Sul to Plant More Corn and Soybeans

Farmers in Rio Grande do Sul are expected to increase their full season corn acreage and their soybean acreage in 2011/12. According to Paulo Molinari from Safras & Mercados, the full-season corn acreage in the state should increase 5% to 5.15 million hectares. Strong corn prices are encouraging farmers to plant more full-season corn and safrinha corn as well. The increased acreage is already being seen in increased purchases of seed and fertilizers. Farmers in the state are anxious to plant their soybeans as early as possible to allow enough time to plant a second crop of corn after the soybeans are harvested.

Recent strong domestic corn prices have allowed farmers in southern Brazil to sell their 2010/11 corn production for a good profit and to invest that money on increased technology for the 2011/12 crop.

Soybean acreage in the state is expected to increase 1-2% and for the nation as a whole, Safras & Mercados is estimating that the 2011/12 nationwide soybean acreage will increase 1.8% from 24.2 million hectares planted in 2010/11 to 24.6 million in 2011/12. If confirmed this will be the fifth year in a row that the nationwide soybean acreage has increased. They are anticipating a nationwide soybean yield of 3,054 kg/ha (44.2 bu/ac), which is below the 3,077 kg/ha (44.6 bu/ac) registered for the 2010/11 crop. The nationwide soybean production is expected to increase 1.2% from 74.4 million tons to 75.3 million tons.

The increased acreage for corn and soybeans in the state will come at the expense of reduced acreage for rice production. The state had a record rice crop last year resulting in depressed domestic prices and exporting the rice is difficult due to the strong Brazilian currency. The state of Rio Grande do Sul is responsible for 64% of Brazil's rice acreage and it is expected to decline 5% in 2011/12. Total rice acreage in Brazil is expected to decline 3.7% from 2.4 million hectares in 2010/11 to 2.3 million hectares in 2011/12 (-100,000 hectares). The Association of Rice Producers in Rio Grande do Sul is even more pessimistic and they feel the that the rice acreage might even fall 100,000 to 250,000 hectares and that total production will be 10-20% below last year's level.

The interest in more corn and soybean acreage is being borne out by increased purchases of fertilizers thus far in 2011. According to the National Association of Fertilizer Distributors (Anda), during the first semester of 2011, fertilizer sales increased 30% compared to 2010. During the month of June alone fertilizer sales jumped 50% compared to June of 2010.