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June 14, 2016

Brazilian Producers asking for Help to Meet Financial Commitments

In the wake of declining soybean and corn production estimates, the Brazilian Agriculture and Livestock Confederation (CNA) held a meeting last week in Brasilia with various government officials requesting help for their members who will not be able to meet their financial commitments due to drought-induced yield losses. CNA is especially concerned for their members in northeastern Brazil including the states of Maranhao, Tocantins, Piaui, and Bahia.

Producers in northeastern Brazil suffered significant losses due to extremely high temperatures and a lack of rainfall during most of the growing season. The crops that have been impacted include soybeans, full-season corn, safrinha corn, and cotton. Safrinha corn production in other states has also been impacted by dry weather and approximately 70% of the anticipated safrinha corn production was forward contracted.

In their June Crop Report, Conab indicated that the soybean crop in the state of Piaui would be down 64% from original estimates and in the state of Maranhao, the soybean yields would be down 41%. Conab estimated that the safrinha corn production would be down 8.4% compared to 2014/15 with the biggest declines in the center-west region of Brazil as well as in northeastern Brazil.

The purpose of the meeting was to explore possible avenues for producers who will not be able to meet their financial commitments. Included in the meeting were representatives from the Soybean and Corn Producers Association of Brazil (Aprosoja), the Bank of Brazil, the Minister of Agriculture, and Treasury officials.

Other meeting will be held in the coming weeks with other bank officials as well as private companies.