February 19, 2016

Goias Soybeans 40% Harvested with an Average Yield of 47.8 bu/ac

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

Farmers in the municipality of Rio Verde in southern Goias have harvested 40% of their 2015/16 soybean crop and the yields thus far have averaged 55 sacks per hectare or 47.8 bu/ac. For the last two years, the soybean yields in southern Goias have been disappointing due to dry weather, so farmers in the region are very pleased with this year's results. The state of Goias is expected to produce approximately 10 million tons of soybeans or approximately 10% of Brazil's total soybean crop. The harvest pace this year is about equal with last year.

Farmers in the region are also planting their safrinha corn as quickly as the soybeans are being harvested. The safrinha corn acreage is expected to remain constant compared to last year and some farmers are expected to reduce the level of technology put into the safrinha corn crop.

In addition to worrying about the weather and prices, farmers in the state of Goias are very upset at the decision of the state legislature to impose a tax on soybeans and corn that are exported. The tax is called the ICMS Tax or a circulation tax that is imposed on any product produced in one state but consumed in another state. Exported soybeans and corn were exempt from the tax since 1996 when the Kandir Law took effect. The amount of tax that will be imposed on grain exports has not yet been determined, but the ICMS tax is usually in the neighborhood of 10%.

Agricultural leaders in the state are asking the judicial system to determine if the imposition of this new tax is constitutional.

The farmers in Brazil are especially upset because the agricultural sector has been the bright spot in an otherwise dismal economic picture in Brazil. Agricultural exports are the main factor allowing for an export surplus and producers feel that the tax will make their products less competitive in the world market. They feel it is particularly galling coming at a time when neighboring Argentina is doing just the opposite by reducing or eliminating export taxes on their grain exports.