December 9, 2010

2010 Brazilian Wheat Crop Best in Several Years

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

Brazilian farmers are wrapping up the harvest one of the best wheat crops in several years. The good crop was the result of favorable weather and increased investments in certified seeds and fertilizer usage. In spite of an 11.8% reduction in wheat acreage, the 2010 Brazilian wheat production is expected to be 11.5% greater than last year. In their November report, Conab estimated that the 2010 wheat crop would reach 5.6 million tons compared to 5.20 million tons in 2009. The quality of this year's crop is also much better than last year's crop which was impacted by heavy rains at harvest and ended up being nearly 50% only feed quality. The average wheat yield in southern Brazil, which produces 90% of Brazil's wheat, is expected to be 20% superior to last year.

In wheat crop in the state of Parana is expected to set a record yield at 2,888 kg/ha or 41.7 bu/ac surpassing the old record of 2,850 set in 2008. Total wheat production in the state is expected to be 3.28 million tons or 58% of Brazil's total crop.

In Rio Grande do Sul, the wheat acreage fell for the second consecutive year, but the statewide average yield is estimated at 2,700 kg/ha or 39 bu/ac, which is the best yield since 2003when the state averaged 2,253 kg/ha or 32.6 bu/ac. Total production in the state is expected to be 1.8 million tons.

Even though wheat production in the cerrado regions of central Brazil was negatively impacted by the prolonged dry season, wheat yields in central Brazil still averaged 1,800 kg/ha or 26 bu/ac and the quality of the crop was considered good. The irrigated wheat in central Brazil averaged 6,000 kg/ha or 87 bu/ac.

Researchers from Embrapa attribute this year's good results to increased use of certified seeds and increased investments in fertilizers. According to the Seed Producers Association of Rio Grande do Sul (Apassul), farmers in the state have been gradually increasing their use of certified seed over the last several years. They estimate that 80% of the wheat planted in 2010 was certified. Farmers have also been shifting more of their wheat production to varieties suitable for bread production because of the higher prices paid for the wheat.

In anticipation of strong wheat prices, Brazilian farmers also increased the amount of fertilizers they applied to their 2010 wheat crop as well. Lower fertilizer prices also helped to reduce the cost of producing the wheat. Researchers from Embrapa in Rio Grande do Sul estimate that the cost of producing the 2010 wheat crop was 19% less than the 2009 crop. Herbicide costs were 53% less than last year and fertilizer costs were down 34% compared to 2009.