July 22, 2011
Farmers in Parana to Plant 15% to 20% More Full-Season Corn
With domestic corn prices as much as 90% higher than last year, farmers in southern Brazil are preparing to plant more full-season corn in 2011/12 reversing a three year trend of planting less full-season corn. In addition to strong corn prices, farmers also want to take the opportunity to rotate some of their soybean acres back to corn production. Estimates are that full-season corn acreage in the state of Parana could increase 15% to 20%.
The decline in full-season corn production in southern Brazil over the last three years has been impressive. During the 2010/11 growing season, farmers in the state of Parana planted only 753,000 hectares of soybeans, which was the least amount since the 1970's when official records began. The renewed interest in increased corn production began with the safrinha corn crop planted earlier in this year. A record amount of safrinha corn was planted in 2011, but dry weather during May and severe freezes at the end of June decimated the crop with losses estimated as high as 35%.
The result has been tight corn supplies and higher prices. A 60-kilogram sack of corn in Parana is selling as high as R$ 28 with a cost of production estimated at R$ 13 per sack. A year ago at this time, the cost of production was lower, estimated at R$ 11 per sack, but the domestic price was also much lower at R$ 14. With domestic prices now more than double the cost of production, farmers in Parana are expected to plant approximately 900,000 hectares of full-season corn. If corn prices strengthen even more over the next 4-6 weeks, corn acreage in southern Brazil may increase even more.
Input suppliers have indicated that corn seed sales have increased significantly this growing season. Fertilizer prices are more expensive this growing season, but the strong corn price more than compensates for the higher fertilizer prices.
Full-season corn and soybeans compete for the same acres in southern Brazil, so if more corn is planted, it is possible that soybean acreage could decline slightly in southern Brazil. Full-season corn planting will begin at the end of August or early in September as soon as there is ample soil moisture to insure germination and crop establishment.
The harvest of the 2011 safrinha corn crop began several weeks ago, but it won't conclude until early September. So much of the safrinha corn was planted so late that approximately half of the safrinha crop in the state is still sensitive to additional losses from adverse weather.