Dec 03, 2009
<i>Safrinha</i> Corn Production In Brazil Continues To Increase
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
The second crop of corn in Brazil, called the safrinha, continues to gain in importance for both farmers who grow the crop and livestock producers who consume the crop. Last year, Brazilian farmers planted 4.8 million hectares of safrinha corn and the total production was 17.3 million tons. This represented approximately 34% of the total corn acreage as well as the total corn production in 2008-09. The percent of the total Brazilian corn crop grown as a second crop after soybeans continues to increase and estimates are that it will increase again in 2009-10.
The two main states that grow safrinha corn are Mato Grosso and Parana and in those two states, corn and wheat are the principal crops grown during the safrinha. Even though domestic corn prices are weak and Brazil has a large carryover of corn, the situation for wheat is even worse. Farmers in southern Brazil who planted wheat as a second crop in early 2009 were generally disappointed with the results. Heavy rains during harvest time negatively impacted the yield and the quality of the crop. Nearly half of the wheat crop in Parana was sold as feed wheat instead of milling quality wheat.
The other principal producer of safrinha corn is Mato Grosso and they had a bumper crop last season. So much so, that many silos in Mato Grosso are still full of last year's corn. The government has been buying the corn at the minimum price in an effort to work down the carryover, but it's been a slow process and farmers continue to pressure the government to move more quickly. For its part the Brazilian government says that it has placed a priority on guaranteeing a minimum price for corn produced in Mato Grosso during the safrinha.
One thing working in favor of increased safrinha corn production is the fact that fertilizer prices in Brazil are now about half what they were a year ago. The cost of growing the safrinha corn this year should be significantly cheaper due to the lower fertilizer costs.
One thing working against safrinha corn production is the continued strength of the Brazilian currency. As the currency gets stronger, Brazilian exports become more expensive. Last year, Brazil exported 7 million tons of corn and that was expected to increase to 8 million tons for the 2009-10 growing season, but the final export tally will in part depend on the Brazilian currency. The government is very concerned about the strength of the currency and has taken numerous steps in recent weeks to keep it from strengthening further.