June 22, 2017

Safrinha Corn Harvest Underway in Brazil

Brazilian farmers are in the early stages of harvesting their 2016/17 safrinha corn crop. The largest corn producing state in Brazil is Mato Grosso which is responsible for approximately 40% of the total production. According to the Mato Grosso Institute of Agricultural Economics (Imea), up until last Friday, June 16, farmers in the state had harvested 12% of their safrinha corn crop representing an advance of about 7% for the week. The harvest pace is 1.8% ahead of last year and 6.3% ahead of the five-year average.

The annual dry season is firmly in place in central Brazil and the hot and dry conditions should accelerate the harvest pace going forward. In Mato Grosso, it is estimated that 17% of the safrinha corn will be consumed within the state, 24% will be shipped to other states, and 54% will be exported.

The other major safrinha corn producing state in central Brazil is Goias where 5% of the corn has been harvested. The state of Goias is responsible for 12% of the total safrinha corn production in Brazil. Farmers in Rio Verde, Goias, are expecting a corn yield of approximately 100 sacks per hectare (92 bu/ac), which is a tremendous improvement over last year's drought-impacted crop when some yields were as low as 20 sacks per hectare (18 bu/ac).

Farmers in Rio Verde are worried about two things - low prices and lack of storage space. The current price of corn in the region is R$ 19.00 per sack (approximately $2.65 a bushel), whereas farmers say their cost of production is R$ 21.00 per sack (approximately $2.93 per bushel). As a comparison, last year at this time, the price of corn was R$ 45.00 per sack (approximately $6.30 per bushel).

A lack of storage space is also a concern because some of the grain silos are still full of soybeans. Farmers have been slow sellers of their soybeans due to low prices which are currently in the range of R$ 55.00 per sack (approximately $7.70 per bushel).

The second biggest safrinha corn producing state is Parana, which is responsible for 21% of Brazil's safrinha corn crop. According to the Department of Rural Economics (Deral), persistent wet weather over the last 3-4 weeks has delayed the start of the harvest which is only 2% complete. Last year at this time 5% of the corn had been harvested. Deral is estimating a record large safrinha corn crop at 13.8 million tons or 36% more than last year.