February 14, 2014
Adverse Weather takes Toll on Crops in Eastern/Southern Brazil
Hot and dry conditions continue to take a toll on crops in eastern and southern Brazil even though a few scattered showers in the region over the last two days have brought some minor relief. The dryness extends from the state of Bahia in northeastern Brazil all the way south to Rio Grande do Sul. The crops impacted the most are soybeans, full-season corn, coffee, sugarcane, and oranges.
In areas of northern Parana, some soybean yields are down as much as 45%. The earlier planted soybeans were approaching maturity when the worst of the hot and dry conditions hit the state and it is the later planted soybeans that have been most impacted because the hot and dry conditions occurred during the critical pod filling period. In western Santa Catarina for example, an emergency has been declared in 13 cities due to low water levels in reservoirs and rivers.
The soybean crop in Rio Grande do Sul might still do OK if abundant rains would return to the state within the next week. Approximately 80% of the soybeans in the state are setting pods and filling pods so the crop still has time to recover if the moisture improves.
As an indication of just how hot it has been in Rio Grande do Sul, since the third week of January until today, an estimated 600,000 chicken have died in the central part of the state due to the high temperatures. During the last week in just four cities, 350,000 chickens died due to lack of electricity to run cooling fans. Poultry producers have already calculated their losses as high as R$ 6 million due to dead birds and low rates of feed conversion for their flocks.
The state of Sao Paulo has been one of the hardest hit areas and the Secretary of Agriculture in the state estimates that some soybean yields in the state might be down as much as 40%.
The Agricultural and Livestock federation of Goias indicated that the state has been dryer than normal since mid-December and that the statewide soybean yields might be down as much as 15%.
In western Bahia where most of the grain production is concentrated, estimates of the soybean yields and corn yields are already declining.
It's not just the soybeans and corn crops being impacted by the adverse conditions. Sugarcane production in southern Brazil could be down as much as 10% due to the dry weather and the coffee crop is expected to be disappointing both this year and next year as well.
Farmers have already started to harvest the early maturing soybeans and the harvest pace accelerates in Brazil, the lack of available trucks to transport the record large crop has driven up freight rates not just for soybeans, but for other crops as well such as cotton.
The cost of transporting cotton out of Mato Grosso, which is Brazil's largest producer, to export facilities in southern Brazil increased 10% since the first of the year. Trucking companies are charging R$ 260 per ton to transport cotton from Rondonopolis, which is located in southeastern Mato Grosso, to the Port of Paranagua. From Campo Verde, also located in southeastern Mato Grosso, to the Port of Santos it costs R$ 283 per ton. As you move further away from the ports, the prices have climbed even higher. From Sorriso in central Mato Grosso to the Port of Santos, it costs R$ 387 per ton and from Sinop in northern Mato Grosso to the Port of Santos it costs R$ 395 per ton.