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October 14, 2011

Slight Increase in Full-Season Corn Expected in Mato Grosso

After declining for three years in a row, the amount of full-season corn production in Mato Grosso is expected to show a slight increase in 2011/12. The strong corn price and favorable currency exchange rate in Brazil is the primary motive behind the increase. While the full-season corn acreage is increasing in the state, it is still very small compared the safrinha corn production in the state.

During the 2007/08 growing season, farmers in the state planted 178,600 hectares of full-season corn, but in 2010/11, the full-season corn acreage fell to just 62,000 hectares or a decline of 65% over three years. Full-season corn acreage is expected to increase slightly in 2011/12 to 69,600 hectares, but it is still tiny compared to the 2.4 million hectares of safrinha corn that is expected to be planted in the state. If these acreage projections are verified, the safrinha corn acreage would be 34 times larger than the full-season corn acreage.

Farmers in the state have already forward contracted 45% of their anticipated corn production, both full-season and safrinha. The strong corn price and the weaker Brazilian currently allowed farmers to forward contract their anticipated corn production at near record prices. Therefore, they have money in their pockets and a contract to fulfill so if the weather cooperates, it is expected that the farmers in the state will do everything possible to maximize their 2011/12 corn production.

In addition to good prices, farmers are also taking advantage of the opportunity to increase some of their crop rotations. Most farmers in Mato Grosso have been producing a monocrop of soybeans for many years and they realize that this is not the best agronomic practice. After years of continuous soybean production, rotations to other crops are very beneficial to help in the control of herbicide resistant weeds, insects, diseases, and soil pests such as nematodes. The strong corn price is giving farmers in the state the first opportunity in several years to do more crop rotations.

In spite of the increased corn acreage, soybeans are still king in Mato Grosso. Mato Grosso farmers are expected to plant 6.7 million hectares of soybeans which are expected to produce 20.8 million tons of grain. In contrast, both the full-season and safrinha corn crops combined are expected to produce 9.7 million tons of corn.