February 20, 2012

Safrinha Corn Production is Profitable in Mato Grosso do Sul

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

The state of Mato Grosso do Sul is the third leading producer of safrinha corn in Brazil. During the 2010/11 growing season farmers in the state harvested 916,000 hectares of safrinha corn that produced 3.12 million tons of corn. The average yield in the state last year was 3,400 kg/ha or 52 bu/ac. The safrinha corn crop was disappointing last year because it was planted late and subsequently severely impacted by a killing frost at the end of June. The safrinha crop in the state is generally planted in February or March and harvested generally in July.

The Brazilian research agency Embrapa conducted a study looking at the cost of producing safrinha corn three different ways, with conventional hybrids then using Bt hybrids and finally producing safrinha corn that is inter-seeded with pasture grass. The idea behind inter-seeding the corn with a pasture grass is to provide some pasture during the dry season between the time the corn is harvested (July) until when the rains return and the pastures recuperate (September to October).

The cost of producing safrinha corn in 2011/12 using conventional corn hybrids is estimated at R$ 1,091 per hectare, the cost using Bt hybrids is R$ 1,195 per hectare and the cost with inter-seeded grass is R$ 1,120 per hectare. If you assume a yield of 3,900 kg/ha (60 bu/ac), then the cost per bushel is US$ 4.15, US$ 4.55, and US$ 4.55 per bushel, respectively.

At the current domestic prices of corn in Brazil, safrinha corn production in Mato Grosso do Sul is considered profitable, even at the relatively low yield of 60 bu/ac. One of the advantages of producing safrinha corn in the southern part of the state is that it is closer to where the corn will be consumed in the neighboring states of Parana and Santa Catarina, thus there is a lower cost for transporting the corn to the end users.

The principal area of safrinha corn production in Brazil is in central and northern Mato Grosso, but cost of transporting the corn to southern Brazil can be prohibitive. During recent years the federal government has had to step in and pick up some of the cost associated with transporting the corn to southern Brazil. Farmers in the state are promoting the increased use of feedlots as a way of consuming more of the corn within the state and then transporting beef out of the state instead of grain.