August 4, 2011

Early Yields Confirming Safrinha Corn Losses in Southern Brazil

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

Farmer's worst fears are being confirmed as their combines start to harvest the 2011 safrinha corn crop in southern Brazil. After a drought during May and freezes at the end of June, losses were expected to be in the range of 35% and that is what farmers are now reporting.

In addition to lower safrinha corn yields, farmers in Parana are also concerned about the low quality of the corn. A significant portion of the corn crop in Parana was still filling grain when a series of frost/freezes hit the crop in late June. For the most immature corn, the quality of the grain is very poor and farmers are concerned if they will even be able to sell their crop even at greatly discounted prices.

In the municipality of Campo Mourao, which is located in western Parana, early harvest results are confirming that the safrinha corn crop will be down 25% to 30% from earlier estimates. The grain quality is so bad that some producers opted to cut the corn for silage instead of for grain because local grain elevators would not accept the corn.

Statewide, the safrinha corn crop is rated 32% poor, 39% average, and 29% good. In the western part of the state, the situation is even worse with 39% poor, 40% average, and 21% good. Farmers in Parana planted 1.72 million hectares of safrinha corn, which represented an increase of 26% compared to 2010. At the start of the growing season, it was estimated that Parana would produce 8.19 million tons of safrinha corn, but the State Department of Rural Economics now estimates that the safrinha corn crop will be 5.19 million tons, or 3 million tons less than expected.

Similar concerns are also being expressed in Mato Grosso do Sul where in the hardest hit areas, safrinha corn yields are down by as much as 65%. In addition to the cold temperatures, much of the corn in the state had suffered through a 40-day long drought before the cold weather hit.

According to Antenor Cassimi, a farmer in the municipality of Sidrolandia, Mato Grosso do Sul, he had been expecting a safrinha corn yield of 98 sacks per hectare (90 bu/ac) at the start of the growing season. Instead, he is reporting that his corn is only yielding 35 sacks per hectare (32 bu/ac). Of his 400 hectares of safrinha corn production, 100 hectares were cut for cattle feed because no ears were produced due to the drought. In general, the losses in the municipality as a whole are expected to be 35% with the average yield falling from 70 sacks per hectare (64 bu/ac) to 45 sacks per hectare (41 bu/ac).

For farmers in southern Brazil that are lucky enough to produce a good safrinha corn crop, they are expected to make a very good profit this year due to the strong domestic corn prices. Corn prices in southern Brazil are currently 80% higher than they were one year ago. Studies in Mato Grosso do Sul indicated that the cost of producing the 2011 safrinha corn crop in the state was R$ 915 per hectare (approximately US$ 235 per acre), which was up from the R$ 907 per hectare it cost in 2010 (US$ 231 per acre).