December 2, 2013

Nature of Corn Production in Brazil Continues to Change

One of the big changes in Brazilian agriculture over the last two decades has been the evolving nature of corn production. The traditional production of full-season corn in southern Brazil has given way to a tremendous increase in safrinha corn production, which is corn that is double cropped after soybeans. Starting out as just a novelty in the 1980s, safrinha corn production has now become the primary method of growing corn in Brazil. The name safrinha means the "little harvest", but is not so little any more surpassing traditional full-season corn production.

A number of factors led to the rise of safrinha corn production including: an increased demand for corn from poultry and hog producers in southern Brazil, the opening up of vast areas of central Brazil to agricultural production, the advent of short maturity soybean varieties, improved corn genetics, and the discovery of soybean rust in Brazil.

safrinha corn production actually started in the state of Parana during the 1980s when the demand for corn surged due to increased poultry and hog production in the state. At the time farmers had become disillusioned with their wheat production so some tried a second crop of corn instead. As soybean breeders developed more short maturity soybean varieties which allowed more time for a second crop of corn, the practice became much more widespread. Today, Parana is the second leading safrinha corn producing state in Brazil surpassed only by the state of Mato Grosso and farmers in Parana now plant several times more hectares of safrinha corn than full-season corn.

After vast areas of Mato Grosso were opened up for agricultural production in the 1980s and 1990s, farmers were looking for crops that could take advantage of the extended growing season. Originally, many farmers planted two crops of soybeans back-to-back and they were very satisfied with the results. That practice of planting two crops of soybeans ended with the introduction of soybean rust into Brazil during the 2000/01 growing season. Controlling rust in the second crop of soybeans became too difficult and expensive and farmers starting experimenting with a second crop of corn instead.

The results of the safrinha corn were encouraging and it also offered farmers the opportunity to sell two crops per year instead of just one. With near record high corn prices for the last several years, safrinha corn production exploded. The state of Mato Grosso went from producing just 7 million tons of safrinha corn two years ago to over 22 million tons during the 2012/13 growing season. The major safrinha corn producing states in Brazil are Mato Grosso, Parana, Mato Grosso do Sul, Goias, and Sao Paulo with 3.3 million, 2.2 million, 1.5 million, 0.78 million, and 0.34 million hectares respectively.

One of the new frontiers for safrinha corn production is now in northeastern Brazil in the states of Maranhao, Piaui, and Tocantins.

International corn prices have now fallen to levels not seen in several years and it remains to be seen if Brazilian farmers will respond to these lower prices by reducing their safrinha corn acreage. With these lower prices farmers will have to reduce their level of investment in the crop if they hope to turn a profit.