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March 7, 2014

Winter Wheat May Replace some Safrinha Corn in Parana

Farmers in Parana are opting for less safrinha corn and more winter wheat for their second crop following soybeans. The dryer weather in January and February coupled with lower corn prices, stronger wheat prices and problems getting the corn planted in a timely fashion convinced some farmers to switch to wheat.

Part of the problem with corn is the fact that it was dry during January and early February when they like to start planting their safrinha corn. The high temperatures and lack of rainfall reduced the soil moisture levels and impeded corn planting and germination. In most of state, the ideal time to plant a second crop of corn had already passed by the end of February.

The Secretary of Agriculture in the state of Parana estimates that the safrinha corn acreage will decline 12% to 1.9 million hectares. If verified, that would be the first time in three years that the safrinha corn acreage fell below 2 million hectares. The safrinha corn acreage is not locked in as yet, and recent rains may still convince farmers to retain their original safrinha corn acreage.

In contrast, winter wheat acreage is expected to increase 20% to above 1 million hectares, which would be the first time over one million hectares of wheat has been planted in the state in three years. Winter wheat planting will start in April and peak in May.

Domestic corn prices in the state are 25% below those of a year ago and as a result many farmers are opting for winter wheat which has improved in price at least 5% since January. Even with the lower prices, corn production is more lucrative considering the cost of production, average yield expectations, and the actual price. A corn could generate a profit of R$ 700 per hectare (approximately US$ 120 per acre) compared to wheat at R$ 500 per hectare (US$ 86 per acre).

The soybean crop in Parana was severely impacted by thirty days without rain and temperatures above 98 degrees which impacted the early maturing soybeans in the northern part of the state. Statewide, the soybean crop is estimated to have lost 12% of its yield potential with losses as high as 40% in 23 of the 26 municipalities in northern Parana. In the hardest hit fields, the crop may not even be harvested.

The earlier maturing soybeans, which represent 70% of the production in northern Parana, were hit hardest, only the later maturing soybeans escaped problems and are expected to yield 3,000 kg/ha (43.5 bu/ac). Seed producers in the region fear they will have a hard meeting quality standards.