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November 2, 2011

Paraguay Soy Acreage Increased, Production Estimated at 8.5 mt

Paraguay is the third largest soybean producer in South America and the early season weather in Paraguay has also been very good. The rains have been widespread and as a result, farmers have taken advantage of the situation to accelerate their 2011/12 soybean planting. Reports indicate that 90% of the intended soybean acreage (3.0 million hectares vs. 2.8 million hectares last season) has already been planted compared to 70% last year at this time. Farmers in Paraguay wanted to plant their 2011/12 soybean crop as early as possible to avoid a potential for dryer than normal weather later in the growing season due to La Nina. The farmers are very pleased with the start of the growing season and if the weather cooperates, they are expecting good yields.

As a result of the increased acreage and good start to the growing season, the total Paraguayan soybean production is now estimated at 8.5 million tons, which would surpass last year's production and set a new record.

Most of the soybeans in Paraguay are produced in the southeastern region of the country along the border with Brazil and Argentina. The soils, climate, and production practices are nearly identical to those in western Parana, which is just across the border. In fact, approximately half of the soybeans produced in Paraguay are produced by Brazilians who have moved across the border in search of cheaper land to expand their operations.

The influx of Brazilian farmers has caused friction with local groups who represent the landless poor in Paraguay. They claim that the Brazilian farmers purchased their land illegally, but the Brazilians counter that everything was done in accordance with the Paraguayan laws. This difference in interpretation has resulted in frequent squatter activity on Brazilian owned land and uncertainty among the Brazilian farmers as to the future of their farming activity in Paraguay.