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May 17, 2011

Dry Weather Could Impact Safrinha Corn Crop in Mato Grosso

Farmers in Mato Grosso continue to be concerned about the impact of dry weather on their safrinha corn crop. The Mato Grosso Institute of Agricultural Economics (Imea) has already lowered their estimate of the crop from 8.4 million tons when the crop was planted to the current estimate of 7.5 million tons due mainly to a reduction in planted acreage. The early end to the rainy season now has farmers concerned that the yields of the late planted corn will be negatively impacted as well.

Due to the lateness of the plating, approximately 45% of the crop has not yet pollinated and remains sensitive to continued dry weather. In most regions of the state, it has been over 25 days since the last meaningful rainfall while the temperatures in the state have been in the upper 80's and low 90's. To avoid yield losses, the late planted corn would need three more good rains, but the near term forecast is calling for continued dry conditions. If no more rain is forthcoming, yield losses could approach 50% for the latest planted corn. Estimates are that as much as 3 million tons of corn production could be a risk.

Farmers in the state have been reluctant to forward contract their corn crop because of the uncertainty of the yields and the anticipation that if the crop ends up being less than anticipated the domestic price of corn in the state should increase. In recent years, the farmers in Mato Grosso have had to sell their corn to the federal government in order to receive the guaranteed minimum price. They are hoping that corn prices will be good enough this year that they will be able to sell their corn into the domestic market.