December 20, 2012

Gross Receipts for the Brazilian Corn Crop Continue to Surge

One of the major trends in Brazilian agriculture in recent years has been the tremendous increase in corn production. The Brazilian corn production has increased from 42.5 million tons produced during the 20005/06 growing season to 73 million tons produced during the 2011/12 growing season. In the center-west region of Brazil along (including the states of Mato Grosso, Mato Grosso do Sul, and Goias), corn production has increased 227% over the last six years. The vast majority of corn produced in the center-west region is a second crop of corn produced after the soybean crop is harvested.

The value of the Brazilian corn crop has also surged over the last six years as well. According to the Brazilian Institute of Research and Statistics (IBGE), the gross value of the Brazilian corn crop in 2012 is estimated at R$ 34.3 billion compared to R$ 16.6 billion in 2006. Strong corn prices are expected to result in even higher gross receipts of R$ 39 billion in 2013 even though Brazil's corn production may decline slightly in 2012/13.

As soon as farmers in central Brazil completed planting their 2012/13 soybean crop, they started purchasing inputs for their 2012/13 safrinha corn crop which they will plant in January and February after the soybeans are harvested.

The safrinha corn acreage in Mato Grosso is expected to increase once again in 2011/12 and seed companies are reported very strong demand for their more popular corn hybrids. Many of the top hybrids have already sold out of the available supply and farmers are settling for their second or third choice. The strong demand for seed has also resulted in higher seed corn prices as well. Farmers in Mato Grosso are paying approximately 35% more for their corn seed compared to last year.