Feb 09, 2010
Mato Grosso Farmers Selling Corn At Half Of The Minimum Price
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Farmers in Mato Grosso are selling their newly harvested corn at prices that are approximately 50% below the minimum price set by the government, which is R$ 13.20 for a 60 kilogram sack. As a result, farmers are only selling what then need to cover immediate bills.
The oversupply of corn is the result of a huge carry over of corn caused by disappointing exports and the government's inability to absorb the corn at guaranteed minimum prices. In Mato Grosso, many of the silos are still full of last year's corn and the government's program to purchase the corn and move it to other parts of the country, where it is needed, has been a debacle. By early February, the government had promised that all the government owned corn would be moved out of the state, but that has not happened, in fact, only a small percentage has actually been moved.
The resulting lack of storage space in Mato Grosso is going to force grain elevators to store the safrinha corn production on the ground for the second year in a row. The declining corn and soybean prices are worrying Brazilian farmers and prices are going to be the factor that determines the 2010-11 crop acreages in Brazil.