September 9, 2015
Dry Beans in Brazil losing Acreage to Soybeans
Farmers in Brazil are expected to expand their soybean acreage by 3-5% for the 2015/16 growing season. The expansion in soybean acreage will come from the following: switching full-season corn to soybeans, converting more degraded pastures to soybeans, the clearing of some new land, and switching from dry beans to soybean production.
The state of Parana is the largest dry bean producing state in Brazil and Conab is estimating that the dry bean acreage in the state will decline 7,200 hectares in 2015/16 to 185,400 hectares. This comes on the heels of a 10% reduction in dry bean production in 2013/14. All of these dry bean hectares are being switched to additional soybean production and this trend is expected to be repeated all across Brazil.
Dry bean production costs have risen in recent years due mainly to an increase in pest pressures mostly caused by white flies. The insecticides used to control the pest are imported and the cost of the insecticide has increased significantly as the Brazilian currency has devalued. Domestic prices for dry beans have not kept pace with the increasing production costs resulting in negative margins for many producers. Therefore, farmers are reducing their dry bean acreage in favor of more profitable soybeans.