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June 4, 2020

2019/20 Growing Season Good for Farmers in Western Bahia

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

Northeastern Brazil has been one of the main expansion area for Brazilian agriculture over the past few decades and the biggest producing area in the region is the western part of the state of Bahia. The three main crops grown in western Bahia are soybeans, corn, and cotton and according to the Bahia Association of Agriculture and Irrigation (Aiba), the 2019/20 growing season turned out to be one of the best in recent years.

Agriculture has been expanding in northeastern Brazil due to several factors including: availability of cheaper land, potential for irrigation, and lower transportation costs due to its closer proximity to export facilities. The main uncertainty in the region is its semi-arid climate, but the rainfall during recent years has been beneficial for crop production.

The 2019/20 soybean harvest is complete with 6.0 million tons of production, which is 0.2 million tons more than last year and the best since 2017/18. The final soybean yield ended at 62 sacks per hectare (55.0 bu/ac), which was 3.3% higher than what had been expected at the start of the season.

The growing season had a problematic start with dry weather during November and December delaying the early soybean planting. As a result, approximately 5% of the earlier planted soybeans had to be replanted. Fortunately, the summer rains normalized in January and remained beneficial for the remainder of the growing season.

Corn yields are also turning out to be good and the corn crop is 40% harvested. The average corn yield in western Bahia is estimated at 165 sacks per hectare (152.4 bu/ac) with a range of 120 to 220 sacks per hectare (110.8 to 203.3 bu/ac). The quality of the corn produced in western Bahia is considered to be very good and since northeastern Brazil generally has a corn deficit, local prices have been very good in the range of R$ 37 to R$ 38 per sack (approximately $3.36 to $3.45 per bushel). Western Bahia is expected to produce 1.5 million tons of corn.

The cotton harvest in the region will start in mid-June and the crop is currently in excellent condition. The Bahia Cotton Producers Association (Abapa) is expecting the 2019/20 cotton yields to be similar to last year with a total production of 1.5 million tons.

While the cotton production is expected to be similar to last year, revenue from the crop is going to be much lower than last year due to declining prices resulting from the Covid-19 pandemic. As a result, farmers in western Bahia are expected to reduce their 2020/21 cotton acreage by 20% to 30% due to the low prices. The unplanted cotton acreage will probably migrate to mostly soybean with some going to corn as well.