June 19, 2013

Safrinha Corn Harvest Starts in Mato Grosso, Storage Limited

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

Farmers in Mato Grosso have started to harvest their safrinha corn crop with approximately 3% of the 3 million hectares harvested, which is slightly slower than last year at this time. An estimated 36% of the corn crop has already been sold, but that is expected to increase as harvest progresses and storage space becomes more limited.

Mato Grosso is expected to produce a record large safrinha corn crop in 2013 and some of the corn will have to be piled on the ground because much of the state's storage space is still occupied by the recently harvested soybean crop. Open air storage is generally not a problem during the dry season (May to September), because of the warm and dry conditions during that time, but the piles will need to be picked up by September or October when the summer rains return.

During the first five months of 2012, approximately 4.4 million tons of corn was exported from Mato Grosso, which is five times more than during the previous year. According to the Mato Grosso Institute of Agricultural Economics (Imea), South Korea was the number one destination of Mato Grosso corn in 2013 followed by Japan, United States, Taiwan, and Egypt.

Imea estimated that farmers from the center-west region of Brazil expended R$ 974 million more to store and transport the soybeans, corn, and cotton produced in the region from January to May of 2013 compared to last year. Mato Grosso alone accounted for 85% of the increased cost or R$ 826 million.

Brazil has some of the highest transportation costs in the world and between 2003 and 2011, the average cost to transport a ton of grain in Brazil increased from US$ 28 to US$ 85.