July 14, 2011

Agencia Rural Estimates 2011/12 Soybean Acreage in Brazil up 3%

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

The consulting company Agencia Rural estimates that Brazilian farmers will plant 24.92 million hectares of soybeans in 2011/12, which would represent an increase of 764,000 hectares compared to 2010/11 or an increase of 3%. If verified, it would represent a new record acreage and the fourth year in a row that soybean acreage increased in Brazil. The company is also estimating that soybean yields in Brazil will return to trend line levels resulting in a total production of 73.4 million tons, which would represent a decline of approximately 1.5 million tons compared to the 75 million produced in 2010/11. Conab estimated that the nationwide soybean yield in 2010/11 was 3,100 kg/ha (44.9 bu/ac) or a new record for the Brazilian crop.

The state of Mato Grosso is expected to have the greatest increase in soybean acreage at 292,000 hectares or 4.6%. The company feels that the increase might have been even more were it not for more restrictive environmental policies recently put in place.

The second largest increase is scheduled for the state of Maranhao with 152,000 hectares (29%), Bahia at 86,000 hectares (8%), Tocantins at 45,000 hectares(11%), Piaui at 37,000 hectares (10%), Goias up 76,000 (3%) and Mato Grosso do Sul up 40,000 hectares.

The increased interest in corn production in Brazil may actually restrict somewhat the expansion of soybean acreage. Farmers in southern Brazil have reduced their full season corn acreage for two years in a row, but that trend may be reversed in 2011/12. Full season corn acreage is expected to rebound in Parana and Rio Grande do Sul in 2011/12 and full season corn and soybeans compete for the same acres in southern Brazil. Therefore, if corn acreage increases in southern Brazil, it will put more emphasis on expanding soybean acreage in central and northeastern Brazil.

Additionally, there is also increased interest in corn production in the expanding agricultural areas of the state of Piaua in northeastern Brazil. Northeastern Brazil always has a corn deficit due to a less than ideal climate for corn production and a lack of suitable corn hybrids adapted to the region. That is slowly changing as seed companies start to introduce corn hybrids developed specifically for the region. Locally grown corn can also command a premium due to the high transportation costs of bringing in corn from other parts of Brazil.