Oct 21, 2009
Wheat Farmers In Parana Batteling From Low Yields And Low Prices
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
The prolonged wet weather that has plagued southern Brazil in recent weeks is taking its toll on Brazil's wheat production. Growing wheat in Brazil is always a challenge due to the possibility of wet weather during harvest. The heavy precipitation can cause lower yields and poor quality resulting in feed-quality wheat instead of milling-quality wheat.
The state of Parana in southern Brazil is the leading wheat-producing state in Brazil accounting for approximately 53% of Brazil's total wheat acreage in 2009. The wheat in southern Brazil is planted in April and May and generally harvested during September and October. Currently, 70% of the 1.3 million hectares grown in the state have been harvested and the yields have been very disappointing. Farmers are reporting losses ranging from 20-80% due to light test weight, rotted seed, and sprouting in the head.
In addition to poor yields and poor quality, Parana farmers are also facing very low prices for their wheat. Wheat prices in Brazil are currently below the cost of production and the farmers would prefer to store their crop instead of selling it at a loss, but a lack of storage space is hampering their efforts. Many of the co-ops still have their silos full of last year's production. Only 6% of the anticipated 2009 wheat production in Parana has been sold.
In an effort to help relieve the situation the federal government is planning on purchasing and later auctioning off 1.5 million tons of Parana wheat, which would be approximately half the state's production in 2009. In recent years, the Brazilian government has established minimum prices for various grains and if the market price falls below the minimum the government then purchases part of the production in order to support prices. The wheat that the government purchases in Parana will then be transported to northeastern Brazil where it will be auctioned off to millers.