May 24, 2012

Drought Worsens in Northeastern Brazil

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

While most of the news in Brazil over the past growing season has centered on the drought in southern Brazil, the states in Northeastern Brazil continued to endure one of the worst droughts in generations. In the state of Bahia, there are 242 cities that have declared a state of emergency affecting approximately 2.7 million residents. In the neighboring state of Rio Grande do Norte, 139 cities have declared emergencies affecting 500,000 rural residents. The entire region of northeastern Brazil has been affected by the drought which is expected to continue until at least September or October with the start of the next rainy season.

In response, the federal and state governments have started to distribute food, water, and grain to the hardest hit areas. On May 31, the federal government is going to auction off 500,000 tons of government held corn reserves for livestock producers and cooperatives in the region to supplement scant feed rations. The federal government announced that 37,000 subsistent farmers in 117 municipalities the region is going to start receiving the first of five payments of R$ 136. These farmers generally produce rice, dry beans, manioc root, and vegetables for family consumption, but this year there has not been enough rainfall to even germinate the seeds.

The Minister of Agriculture in the state of Bahia estimates that the small family farmers in the state have lost between R$ 2.5 and R$ 3.5 billion in revenue due to the drought. Many livestock producers are relying on trucked-in water for their animals and have been forced to sell off some of their herds.

Most of the problems have been in eastern Bahia, but the western part of the state has also been impacted by the dry weather. In recent years, the production of soybeans, cotton, and corn has greatly expanded in western Bahia, but the recently harvested soybean crop in the state ended up being very disappointing due to dry weather during the pod filling period.

In an ironic twist, the city of Salvador, which is the capital of Bahia, has recently been inundated with over 200 mm of rainfall (8 inches), which is more than 50% of their normal monthly rainfall for May. The city of Salvador is situated on the Atlantic coast and unfortunately the rainfall did not penetrate the interior of the state.