July 25, 2013

Farmer Corn Sales in Mato Grosso Continue at Slow Pace

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

Farmers in Mato Grosso continue to be slow sellers of their 2013 safrinha corn crop. According to the latest report from the Mato Grosso Institute of Agricultural Economics (Imea), approximately 43% of the anticipated 17 million ton production has been sold, which is basically unchanged from last week and it remains 21% below last year's sales pace.

Imea estimates that 57% of the safrinha corn crop in Mato Grosso has been harvested, which is an increase of 17% in a week. In the central part of the state, the corn is 68% harvested with an average yield of 110 sacks per hectare (6,600 kg/ha or 101 bu/ac). Imea continues to estimate that the statewide yield for Mato Grosso will be 100 sacks per hectare (6,000 kg/ha or 92 bu/ac).

The federal government has launched its second auction under the Pepro program to purchase another one million tons of corn in Mato Grosso. The goal of the Pepro program is to assist farmers by purchasing corn in areas of the country where the local price of corn is below the cost of production. The minimum price for corn set by the program is R$ 12.95 per sack and there are areas of Mato Grosso where a sack of corn has sold as low as R$ 9.00 per sack. The average cost of production for corn in Mato Grosso is estimated at approximately R$ 13.00 per sack.

The government then subsidizes the transport of the corn to livestock producers or exporters in southern Brazil. The hope is to help empty some of the grain silos in the state that are currently filled with old crop soybeans and new crop corn. There is already a lot of corn piled on the ground due to a lack of storage space and the government is trying to keep the situation from getting worse. Approximately R$ 700 million has been allocated for the Pepro program in 2013.