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July 29, 2020

Brazilian Farmers could make Record Profits on their 2020/21 Crops

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

Farmers in Parana may be disappointed in their 2019/20 safrinha corn yield, but they are certainly very pleased with their profit margins on the corn that they did produce. In fact, the Department of Rural Economics for the State of Parana (Deral) is reporting that the 2019/20 growing season was the most profitable year in history when they compared the cost of producing the corn vs. the price of corn.

The price of safrinha corn in Parana is in the range of R$ 40.00 per sack (approximately $3.63 per bushel), whereas the cost of production is in the range of R$ 25.00 to R$ 27.00 per sack (approximately $2.27 to $2.45 per bushel). That means they are making profits of about R$ 15 per sack or approximately $1.36 per bushel.

The Mato Grosso Institute of Agricultural Economics (Imea) estimates that the breakeven point for safrinha corn production in the state in 2020/21 is R$ 22.58 per sack (approximately $2.05 per bushel) and the current price of corn in the state is R$ 31.86 per sack (approximately $2.89 per bushel) compared to R$ 23.00 per sack last year (approximately $2.10 per bushel). That means they could make a profit of $0.85 per bushel on their 2020/21 safrinha corn production.

Imea estimates that the cost to produce soybeans in the state in 2020/21 will be R$ 3,597 per hectare (approximately $291 per acre) or roughly $6.00 per bushel if the yield is 48.5 bu/ac. The current price of soybeans in the state is R$ 104.00 per sack (approximately $9.45 per bushel) compared to a year ago when it averaged R$ 62.00 per sack (approximately $5.65 per bushel). That means they could make a profit of $3.45 per bushel on their 2020/21 soybean production.