October 5, 2012

Delivery of Inputs to Mato Grosso Farmers Being Delayed

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Congestion at the ports in southern Brazil and new restrictions on truck drivers have resulted in delays in the delivery of fertilizers and seeds to farmers in Mato Grosso who are ready to start planting their 2012/13 crops.

The problems at the port have been ongoing for several months as federal workers participate in a work slowdown as they negotiate with the federal government on new labor agreements. This has slowed the inspection and authorization of vessels entering and leaving the two main ports in Brazil of Santos and Paranagua.

These two ports are the main entryways for imported fertilizers into Brazil. Brazil imports 50% of its phosphorus, 75% of its nitrogen, and 90% of its potassium, all of which are essential for crop production in the country. As a result of the work slowdown, some vessels carrying imported fertilizers have been forced to wait nearly two months to unload their cargos.

Once unloaded, a lack of truck transport has made it difficult to get the fertilizers to where there are needed in the interior of the country. Newly adopted restrictions on how long a truck driver may work in a 24-hour period have reduced the total number of trucks available. As a result, most independent drivers are only accepting short hauls where they can be assured of making money.

Getting the fertilizers from southern Brazil to the state of Mato Grosso is a very long haul, which is exactly the type of trips that the independent drivers are avoiding. For those companies willing to do the long hauls, the freight rates have soared since the new regulations took affect at the end of July.

Delays in seed delivers in Mato Grosso have been solely the result of the trucking problem. Much of the seed is stored in climate controlled warehouses until just before planting in order to help maintain the quailiyt of the seed. The problem is that as planting approaches, everyone wants their seed delivered at the same time and that is causing a bottleneck in deliveries.

These logistical problems could result in a slower planting pace of the 2012/13 soybean crop than what was originally anticipated. Farmers in central Brazil started planting their 2012/13 soybean crop during the second half of September and they will complete planting by early November.