January 26, 2012

Rains Help Lift Spirits of Farmers in Rio Grande do Sul

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

Recent rains in Rio Grande do Sul in southern Brazil have been some of the best rains in several months. For the earlier planted soybeans, these rains came just as the soybeans were entering their pod setting and pod filling stage. Some farmers are reporting that their soybeans grew 15 to 20 cm (6 to 8 inches) in just one week. Producers who were expecting a near total loss of their soybeans are now expecting the production to be down approximately 50%. Producers who harvested 50 sacks per hectare last year (3,000 kg/ha or 43.5 bu/ac) are expecting to harvest 25 sacks per hectare this growing season (1,500 kg/ha or 22 bu/ac).

The soybean crop in the state still has many challenges ahead and the state will not even get close to producing a normal type of crop, but at least now there is a little hope where before there was only desperation. To keep the crop from once again deteriorating it would need about three quarters of an inch of rainfall on a weekly basis. Any extended period of dryness over the next two months will once again result in declining yields.

The rice producers in the state have not been as fortunate as the soybean producers. Rio Grande do Sul is the largest rice producing state in Brazil responsible for approximately 65% of Brazil rice production. The vast majority of rice in the state is grown in the western part of the state where it is irrigated. This is also the part of the state where the drought has been the most severe and as a result, many rice producers have to irrigate their rice fields when normally they would be receiving ample rainfall. Reservoirs in the state are already low and if the rainfall doesn't increase soon, it is possible they will run out of irrigation water just as the crop'Ls demand for water peaks.

Rice producers in Brazil cut back on their rice acreage this year by 9.5% to 2.55 million hectares. A number of factors contributed to this reduced acreage including: low prices, increased cost of production, and a migration toward other crops such as soybeans that offer a better return on investment compared to rice production.

Total rice production in Brazil is expected to reach only 11.46 million tons or approximately 16% less than last year. In 2010/11 Brazil exported 1.8 million tons of rice, but Conab is expecting that to fall to 700,000 in 2011/12.

In addition to irrigated rice production in Rio Grande do Sul (65% of the total); dry land rice is grown throughout Brazil especially in the far northern locations where there is more abundant rainfall. Even though the acreage of dry land rice has been declining in recent years, the introduction of higher yielding varieties as kept dry land rice production essentially stable.