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November 29, 2012

Record Safrinha Acreage in Mato Grosso, down from Prior Est.

Farmers in Mato Grosso are expected to plant less safrinha corn than what was initially expected. According to the latest assessment from the Mato Grosso Institute of Agricultural Economics (Imea), the safrinha corn acreage is estimated at 2.78 million hectares compared to the earlier estimate of 2.91 million hectares or a reduction of 4.4%. The acreage estimate could decline even more if wet weather delays the soybean harvest in January and February. Even with the lower estimate, the safrinha corn acreage in the state is still expected to set a new record and be 11% larger than the 2.5 million hectares planted in 2011.

The primary reason for the lower acreage estimate was delays in getting the soybean crop planted due dry conditions. The safrinha corn is planted after the first crop of soybeans are harvested and the ideal window for planting the corn closes on about February 25th. If the corn is planted after that date, there is an increased possibility that the crop will run out of moisture before it completes the grain filling process.

The total safrinha corn production in Mato Grosso is projected at 13.29 million tons, or 14.7% less than the 15.58 million tons produced in 2011. The estimated statewide corn yield is now estimated at 80 sacks per hectare (4,800 kg/ha) or approximately 74 bu/ac. The long term average corn yield for the state is 75 sacks per hectare (4,500 kg/ha) or 69 bu/ac. The weather during the 2011 growing season was considered near perfect with abundant rainfall until the end of June and as a result, the corn yield in Mato Grosso in 2011 set a new record of 104 sacks per hectare (6,240 kg/ha) or 96 bu/ac.

Increased costs are expected to make farmers more cautious in their input purchases. During the 2011 growing season, the average cost of safrinha corn production in the state was R$ 1,528 per hectare (approximately US$ 301 per acre) and that is expected to increase to R$ 1,754 per hectare in 2012 (approximately US$ 346 per hectare).

One of the principal reasons for the increased cost is the price of hybrid corn seed. For some of the premier corn hybrids, the cost of the seed has increased 40% compared to 2011. In 2011, the seed represented 19% of the cost of production and that is expected to increase to 23% in 2012.

As a result of greater risk due to later planting and higher cost of production, farmers in the state are trying to control their costs by purchasing cheaper seed and applying a little less fertilizer. Last year 80% of the corn planted in the state was of high technology and that is expected to decline in 2012/13. Farmers are hoping to maintain the same level of profitability they obtained in 2011 by controlling their costs.