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August 4, 2017

Mato Grosso Farmers have Purchased 81% of Inputs for 2017/18

The Mato Grosso Institute of Agricultural Economics (Imea) recently indicated that farmers in the state have purchased 81% of the inputs needed for the 2017/18 soybean crop in the state. Farmers in the state purchase their inputs three ways - by barter, paying out of their own pocket, and by getting production loans from banks.

Prior to June, the purchasing of inputs in the state was very slow as farmers were waiting for price direction based on the condition of the U.S. crops. Purchasing picked up during July as commodity prices strengthened modestly. Farmers who are still waiting to purchase their inputs are probably waiting for their production loans to be approved at the bank, which should occur sometime during August. The planting of the 2017/18 soybean crop in the state won't get started for another 45 days, so there is still time to purchase the inputs and get them delivered in time for planting.

Farmers in the state are expected to purchase 1/3 of their inputs by bartering with the international grain companies or chemical distributors, 1/3 will be paid for out of pocket, and 1/3 will be paid for with production loans from banks. Which is the best way, it depends on the individual and the year.

Imea is estimating that the cost of producing soybeans in Mato Grosso in 2017/18 is expected to decline 6% compared to last year to R$ 3,031 per hectare (approximately $394 per acre). The lower cost this year is due to a stronger Brazilian currency in relation to the U.S. dollar. A stronger currency results in lower prices for imported items such as fertilizers and chemicals. The Brazilian real closed Thursday at 3.11 to the dollar.