August 3, 2017

Low Commodity Prices Worry Parana Farmers in Southern Brazil

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

Farmers in the state of Parana in southern Brazil are in the midst of harvesting their 2016/17 safrinha corn crop and also planning for their 2017/18 summer crops.

According to Jose Antonio Borghi, president of the Rural Syndicate of Maringa, the safrinha corn harvest in the region is over 50% complete. Maringa is located in the norther part of the state and it is a prime location for safrinha corn production. Borghi indicated to Noticias Agricolas that he is expecting the corn yield in the region to average in the range of 80 to 90 sacks per hectare (70 to 83 bu/ac).

When the harvest got underway, some corn yields were as high as 120 sacks per hectare (110 bu/ac), but the yields steadily declined as the harvest moved into the later planted corn. Apparently, farmers became more cautious as the planting season progressed due to drastically declining corn prices. As a result, farmers reduced their level of inputs for the later planted corn resulting is lower yields for the later planted corn.

The local price for corn is currently in the range of R$ 17 per sack ($2.41 per bushel), which unfortunately, is below the cost of production. Due to the low prices, farmers in the region have only sold 20% to 30% of the safrinha corn production. A lot of the local grain silos are still filled with the record large 2016/17 soybean crop, so many farmers have invested in silo bags to store their corn. Any farmer that is forced to sell their corn "off the combine" will probably sell at a lost.

Many farmers are expressing caution concerning their 2017/18 soybean crop due to the current low prices. Some farmers were able to sell their 2016/17 soybeans for as much as R$ 65 per sack (approximately $9.25 per bushel), but most of the soybeans were sold in the range of R$ 60 per sack (approximately $8.50 per bushel). They have been slow sellers of the old crop and slow to forward contract their new soybean crop as well.