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January 18, 2012

Strong Demand Results in Seed Shortage for Safrinha Corn Crop

The farmers in Mato Grosso and in Parana are anxious to harvest their early-maturing soybeans so they can start planting the safrinha corn in a timely manner. The Mato Grosso Institute of Agricultural Economics (Imea) estimates that the safrinha corn acreage in the state will increase 25.8% and that the total production will increase 40%. If realized, the safrinha corn production in the state will total 9.8 million tons, which is significantly higher than the 6.9 million tons produced in 2010/11.

The increase in acreage has resulted in very tight supplies of available seed corn and higher prices. Farmers who have waited to purchase their seed corn are finding that the most popular hybrids have been sold out for weeks and they will have to settle for second tier or third their hybrids. The tight supplies have also caused the average price for seed corn in the state to jump 30% compared to last year.

Farmers in Mato Grosso will plant their safrinha corn after the harvest of early-maturing soybeans. The initial soybean harvest in the state started even before the end of December, but recent rainy weather has slowed the harvest pace such that only about 1% of the soybeans have been harvested. Normally by this time of the year 4% to 5% of the soybeans in the state would had been harvested.

The planting window for safrinha corn in Mato Grosso closes about the third week of February, so there is still time to plant the crop, but the earlier it is planted the higher the yield prospects. Farmers in the western part of the state are actually planning their safrinha cotton before the corn. safrinha cotton must be planted before the end of January and if rains continue to delay the soybean harvest, it is possible that some of the intended cotton acres could be switched to additional soybean production.

In southern Brazil farmers in Parana are also starting to plant the safrinha corn crop. A prolonged drought in the state has accelerated the maturity of the early maturing soybeans by about 10 days leading to an early start to the soybean harvest. Now that it has finally rained after two months of almost no rainfall at all, farmers want to take advantage of the soil moisture and plant their safrinha corn as quickly as possible.

Farmers have also been very aggressive in forward contracting their anticipated safrinha corn production. Through the second week of January, approximately 47.5% of the anticipated corn production in Mato Grosso had already been sold.