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November 18, 2014

Wheat Crop in Rio Grande do Sul in Southern Brazil a 'Disaster"

Wheat producers in Rio Grande do Sul are facing bleak prospects for their 2014 wheat crop. Not only are the wheat yields in the state very disappointing, the quality of much of the wheat is very poor making it unfit for human consumption.

The problem for wheat producers in the state has been very heavy rains and high temperatures during the entire growing season. Excess rain and high temperatures started during planting and continued through flowering, grain filling, and harvest.

According to the head of Embrapa Wheat, Sergio Roberto Dotto, the wheat crop this year was a disaster especially in the northern part of the state. High rainfall and high temperatures resulted in very high levels of diseases such as rice blast which is rarely seen in the state and very difficult to control. The infestation of gibberella also much higher than normal. As a result, not only have the yields been impacted, but much of the wheat is not fit for human consumption and the toxicity levels may be so high that it may not even be fit for animal feed.

Emater is reporting that 75% of the wheat in the state has been harvested and that losses are in the range of 30% to 60%. They are reporting losses of 45% in the municipality of Ijui, 60% in Santa Rosa, 50% in Frederico Wastphalen, 30% in Passo Fundo, 50% in Soledade, and 40% in Erechim. Statewide, they feel the yields may fall to the range of 1,200 to 1,500 kg/ha (18-22 bu/ac).

The director of the Syndicate of Wheat Industries in the state affirmed that the majority of wheat that has been delivered to millers thus far is not acceptable for human consumption due to low Ph and higher than acceptable levels of toxins. It is possible that the worst wheat may not even be acceptable for animal feed. As a result, Brazil will need to once again import large quantities of higher quality wheat from Argentina or the U.S. Last year Brazil imported approximately 5 million tons of wheat from the U.S. and for the coming year, Brazil may need to import 1-2 million tons of U.S. wheat or more.

Wheat producers are also very concerned because crop insurance does not cover the potential for low prices due to poor quality wheat. Farm groups in the state have already petitioned the Minister of Agriculture for help in purchasing the wheat or at least allowing their production loans to be refinanced for a longer period of time.

Conab reduced their estimate of the 2014/15 Brazilian wheat crop from 7.6 million tons in October to 7.0 million tons in their November Report, but most analysts feel they are still much too optimistic concerning the crop.