March 5, 2013

Rondonopolis, Mato Grosso

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

Over the last four days we have traveled through most of the soybean/corn area of Mato Grosso. The soybean crop in the state is approximately 59% harvested with some areas nearly 100% harvested. The farmers have made a lot of progress planting their safrinha corn with approximately 87% of the corn planted in the state.

The weather thus far in Mato Grosso has been one day of rain for several hours and three days of mostly sunny skies with scattered afternoon showers. We have seen a lot of field work getting done including: soybean harvesting, corn planting, corn spraying, cotton spraying, and fertilizer being applied to the corn. The noon-day sun is directly above Mato Grosso (90 degrees vertical), so the sun is very bright and intense with temperatures easily in the upper 90's or more on most days.

Below are my observations about the soybean crop thus far in Mato Grosso.
  • The early maturing soybeans are all harvested and most of the medium maturing soybeans have also been harvested. What is left to harvest is mainly the latest maturing soybeans.
  • I am not impressed with the soybeans remaining in the field. Many of the soybeans ready for harvest are very short and low yielding. The soybeans that are still green or close to maturity look better, but the crop still only looks to be only an average crop.
  • Some of the mature soybeans have been waiting to be harvested for several weeks and the quality of the seed is poor in some cases, but nearly all the very poor quality soybeans have already been harvested.
  • The soybean crop in Mato Grosso is going to be disappointing due to the excessive rainfall in January and early February and the lack of sunshine during the critical pod filling period.
  • They should be finished harvesting the soybeans in Mato Grosso in 2-3 weeks.
Below are my observations about the corn crop thus far in Mato Grosso.
  • Wow! This is the most safrinha corn I have ever seen in Mato Grosso!
  • The cotton acreage is way down (down 36% from last year) as many farmers opted to plant soybeans instead.
  • In some areas, it is corn from horizon to horizon, unbelievable. In these areas it looked like every soybean field had been planted to a second crop of corn.
  • The crop ranges from just being planted to chest high. The average corn height is probably about knee high. There are a very few fields just starting to tassel and they must have been planted in early January.
  • The safrinha corn crop in Mato Grosso looks very good for the time being. The plant population is good, the color is good, and I did not see any moisture stress at all.
  • The rainfall is diminishing in Mato Grosso and that is a concern for the corn crop because the crop will need rain through the month of May.
  • Most of the corn will be harvested in May and June.
  • Thus far, I have been very impressed with the safrinha corn crop in Mato Grosso, but the eventual yields will be determined by when the rainy season ends.
Road conditions are the "worst ever" in Mato Grosso.
  • We drove hundreds of kilometers on BR-163, which is the only major asphalted highway through central Mato Grosso and the condition of that highway is horrendous. On some stretches of the road, they have tried to fill the worst potholes, but in other stretches, it is pothole after pothole. There are an incredible amount of trucks going in both directions and if you get behind a line of tucks, it is nearly impossible to pass, especially if it is raining.
  • The average speed on the highway is slower than normal due to the number of trucks and the poor road conditions.
  • They are in the process of widening BR-163 to four lanes through a small mountain range in south-central Mato Grosso, which makes the traffic even worse.
  • Some of the highways in Mato Grosso have already been converted to toll roads with a toll charge of R$ 6.50 for cars (USD 3.50) and R$ 49.50 for dual-tandem trucks full of soybeans (USD 24.75). The trucks must travel down these toll roads because there is no other alternative. Eventually, all the major highways in the state will become toll roads, which will increase the cost of transportation even more!
  • The capital of Mato Grosso is Cuiaba and every major street in the town is under construction as the city prepares for the world cup games next year. It takes an hour to go across the city due to the traffic gridlock caused by the construction.
  • The new stadium in Cuiaba is about 70% complete and they expect it to be finished by late 2013.
  • Brazil is on a spending spree and the say it is all because of the World Cup, but much of the spending has nothing to do with the World Cup itself.
  • The country is spending like crazy now and counting on oil revenue to bail them out when all the bills come due!
Truck driver law has unintended consequences.
  • The Brazilian truck drivers are obeying the new law that limits them to 8 hours of driving before they must rest for 11 hours. Additionally, they must rest for 30 minutes for every four hours of driving.
  • The evidence that it is working is from the hundreds and hundreds of trucks we saw parked in the middle of the morning or the middle of the afternoon. Normally, the drivers all stop for lunch, but they keep driving during the other times of the day.
  • The trucks are parked anyplace they can find space for the big dual-tandem trucks that can be as much as 27 meters long. Trucks were parked at gas stations, along the side of the road, on city streets, any place where there was enough room.
  • Every truck has a recording device that tracks the speed of the tuck and the hours of operation during a 24-hour period. The drivers are required to change the paper tape in the device every day. They must keep the old tapes for 30 days and if stopped by the police, they must show the tapes for the past 30 days.
  • The law was passed to help avoid accidents caused by driver fatigue, but the accidents are being caused by the poor condition of the highways, not driver fatigue! We saw several accidents where trucks had overturned when they tried to avoid an extra big pothole when they were fully loaded.
  • The unintended consequence is that drivers are now driving faster in order to make up for the time lost while "resting". They are also taking extra risks like passing when they should not, all in order to make up lost time.
  • The law was intended to reduce accidents, but it might just be having the opposite effect.
  • It is very obvious that at any given time, a significant portion of the grain trucks in Brazil are sitting along the side of road "resting". The new law has probably added several days at least for a truck hauling grain from central Mato Grosso to a port in southeastern Brazil.
  • As a result, freight rates have increased significantly. It can now cost up to USD 120 per ton to transport soybeans to a port. In some parts of Mato Grosso, transportation can cost 25% to 27% of the price of soybeans.
  • We were following some trucks yesterday that were dribbling soybeans out the back because they were trucks designed to haul dry goods and not soybeans. It was a constant dribble and you could hear the soybeans hitting our car - tick, tick, tick. I am sure that truck is going to lose hundreds of pounds of soybeans during the five days or so it will take to get to the port. What a waste.