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September 1, 2011

Farmers in Rio Grande do Sul to Increase Corn Acreage in 2011/12

Farmers in Rio Grande do Sul are expected to increase their corn acreage in 2011/12 while their soybean acreage is expected to remain basically unchanged. The state's extension service is estimating that 1.1 million hectares of corn will be planted in the state in 2011/12 (an increase of 4.8%) and that 4.1 million hectares of soybeans will be planted (an increase of 0.8%).

Corn is gaining acreage in the state due to the strong domestic corn price and increased demand from local livestock producers. Farmers also recognize the necessity to rotate their soybeans and they are taking advantage of the elevated corn price to increase rotations.

In addition to planting more corn, another recent trend in the state is that corn and soybeans have been migrating to different regions of the state. More corn is being planted in the northwestern quarter of the state, which has been a traditional stronghold of soybeans because the rainfall in recent years has been more favorable for corn. Soybean production has been migrating southward in the state because the southern part of the state receives less rainfall and soybeans are more resistant to dry weather than corn.

The state of Rio Grande do Sul is the largest rice producing state in Brazil, but farmers in the state are expected to reduce their rice acreage in 2011/12 by 5.6% to 1.1 million hectares. High carryover stocks and low prices make it difficult to justify expensive irrigated rice production.