May 28, 2014

Corn Production Costs Higher in Mato Grosso for 2014/15

The Mato Grosso Institute of Agricultural Economics (Imea) released new estimates for the cost of producing corn in the state for 2014/15 and it is not good news for producers. They estimate that it will cost R$ 1,959 per hectare for high technology production (US$ 360 per acre) and R$ 1,787 per hectare for medium technology production (UD$ 328 per acre). In other words, it would take a yield of 97 sacks per hectare (5,820 kg/ha or 89.6 bu/ac) to cover the production cost for the higher technology and 87 sacks per hectare (5,220 kg/ha or 80.3 bu/ac) to cover the costs for the medium technology.

Imea is currently estimating the yield in Mato Grosso for the 2013/14 growing season at 85.4 sacks per hectare or 74.3 bu/ac. For the two prior years, the corn yield in the state averaged 102.6 sacks per hectare or 94.8 bu/ac.

If corn prices would stay where they are right now, most corn producers in the state would be looking at a break even scenario for 2014/15. To regain some of the safrinha corn acreage lost in 2014, corn prices would need to move higher from current levels.