December 14, 2010

Agricultural Storage in Brazil Increased 1.3% over Past Year

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

According to IBGE (the Brazilian Census Bureau), during the first semester of 2010, the total storage capacity of Brazil increased 1.3% even though the number of active storage operations declined 0.4% during the same period. At the end of the first semester in 2010, there were 8,785 active storage operations in Brazil. This included storage for soybeans, corn, rice, dry beans, wheat, coffee, and cotton. By region, 43% of the nation's storage operations were in the south, 22.8% were in the southeast, 22.1% in the center-west, 8.5% in the northeast, and 3.6% in the north. All combined, the total storage capacity in Brazil is 146.6 million tons.

The total grain storage is 53.5 million tons and the center-west has 49.5% of the total and the south has 33.8% of the total. Vertical silo storage is 47.1 million tons with the south having 55% of the total and the center west having 26.6% of the total. The remaining grain storage is horizontal.

The amount of stored grain increased from the end of the first semester in 2009 to the end of the first semester in 2010. Soybean stocks increased 39% from 13.8 million tons to 19.2 million tons. Corn stocks increased from 10% from 11.0 million to 12.1 million tons.

A lack of storage space is always a concern in Brazil due mainly to the fact that so little of the grain is stored on-farm. Estimates are that less than 15% of Brazil's grain storage is located on the farm. Farmers have been very slow to build additional on farm storage due to a lack of credit availability and inadequate federal incentives to build storage units.