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November 26, 2014

Wheat Crop in Rio Grande do Sul Continues to Disappoint

We have been reporting for several weeks about the disappointing wheat crop in Rio Grande do Sul in southern Brazil. The crop was adversely impacted by excessive precipitation all throughout the growing season which led to excessive disease pressures. According to Emater/RS, the wheat crop in the state is now approximately 80% harvested. In two important wheat producing municipalities such as Santa Rosa and Ijui the crop is 95% harvested. The wheat yields this year in Rio Grande do Sul are very low and the quality of the grain is poor and as a result, many farmers looking at losses for their 2014 wheat production.

In the municipality of Ijui, which represents 27% of the state's wheat production, wheat yields this year averaged 1,496 kg/ha (approximately 22 bu/ac) which is about half of the 2,976 kg/ha that was expected at the start of the growing season (approximately 43 bu/ac). In Santa Rosa, which represents 19% of the state's production, it is even worse. Yields this year have averaged 1,150 kg/ha (approximately 16.5 bu/ac) which represents 60% reduction compared to the 2,895 kg/ha expected at the start of the growing season (approximately 42 bu/ac).

Statewide, Emater/RS expects the wheat yield to average 1,567 kg/ha (approximately 23 bu/ac) which is about half of last year's yield (3,164 kg/ha or approximately 46 bu/ac). Production for the state is estimated at 1.8 million tons compared to the 3.1 million tons produced last year.

Just looking at the yields does not tell the complete story of this year's wheat crop. Much of the wheat being harvested in the state is of such poor quality that it is not suited for milling and in some cases the toxicity levels are so high, it is not even suited for animal feed. As a result, Brazil will need to import more high quality wheat than had been expected from either Argentina or the United States.