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December 5, 2011

Soybean Acreage in Western Bahia to Surpass One Million Hectares

One of the new agricultural frontiers of Brazil is in western Bahia state centered on the city of Luis Edwardo Magalhaes where over one million hectares of soybeans will be planted in 2011/12. Producers in the area are expecting soybean yields in the region to be similar to the 55 sacks per hectare (3,300 kg/ha or 47.8 bu/ac) achieved last growing season and for corn, they are expecting yields of 160 sacks per hectare (9,600 kg/ha or 148 bu/ac).

Planting in the region started earlier than normal this year due to the early onset of the rains and planting of the soybean and corn crops is nearly complete. Producers in the region are expected to increase their full-season corn acreage to 190,000 hectares this growing season. The full-season corn that has already been planted is generally is good condition. The most advanced corn in the region is irrigated and it is currently pollinating. Most of the corn is approximately two feet tall and developing vegetative. Roughly 40% of the anticipated soybean and corn production has already been forward contracted. Western Bahia is also the second leading cotton producing region in Brazil and farmers will start planting their 404,000 hectares of cotton in December.

Most farms in the region are large corporate entities, both Brazilian and international. The level of technology applied to crop production in western Bahia is some of the highest in Brazil. The region is very flat and the original vegetation was short-cerrado, or a grassy savanna with short trees. The vegetation is easily cleared and converted to agricultural production.

Farmers in the region are closely watching the debate in the Brazilian Congress as they prepare to vote on new environmental regulations known as the Forestry Code. This new legislation has the potential to revolutionize Brazilian agriculture. One part of the legislation proposes stricter enforcement of laws that have been on the books for decades, but were widely ignored. The law requires that 40% of the land must remain in its native vegetation and if the enforcement is made retroactive, it has the potential severely hamper Brazilian agriculture because many if not most farmers in Brazil would be required to take land out of production and replant it to native vegetation.