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November 13, 2014

Brazil's Safrinha Corn Acreage to Decline due to Delayed Planting

The lack of rainfall during October which delayed the planting of the soybeans in much of Mato Grosso, is also going to result in a reduction of safrinha corn acreage in the state. The subsequently delayed soybean harvest means that farmers will not be able to plant all of their safrinha corn before the ideal planting window closes in Mato Grosso about February 20th. That is the assessment of the director of the Mato Grosso Soybean and Corn Producers Association (Aprosoja) Nery Ribas.

According to the Mato Grosso Institute of Agricultural Economics (Imea), approximately 67% of the state's soybeans had been planted by the end of last week compared to 86% during the same time in 2013. The most advanced planting is in northern Mato Grosso where 77% of the soybeans have been planted. The most delayed planting is in eastern Mato Grosso where just 33% of the soybeans have been planted.

Ribas estimates that the safrinha corn acreage might decline 40% in the eastern part of the state with a 30% decline in the northern part of the state and a 15% decline in western and southern Mato Grosso. Conab will not officially estimate the safrinha corn acreage in the state until January or more likely February. During the 2013/14 growing season, Mato Grosso planted 35% of Brazil's safrinha corn acreage followed by Parana at 21%.

In related news concerning corn production in Mato Grosso, there are still producers waiting for payments from the Pepro auctions conducted over a year ago in 2013. Officials from Conab, which conducted the auctions, stated that the delays are being caused by inconsistencies in the documentation submitted by producers.

There are still 380 sales waiting to be processed by Conab due to delays or inconstancies in the documentation. A total of R$ 351 million had been paid out by November 6th to corn producers in the state for auctions conducted in 2013 and there is still R$ 37 million left to pay. These auctions are conducted when the local price of corn falls below the guaranteed minimum price set by the government, which in Mato Grosso is approximately US$ 2.80 per bushel. The government does not purchase the corn, but rather subsidizes the difference between the market price and the minimum price. The farmer then has a limited time to sell the corn in the domestic market and submit the paperwork to Conab.

In 2014 the government has subsidized the price of approximately 5 million tons of corn in the state at a cost of R$ 235 million, or about 30% of the state's total corn production.