Feb 23, 2010
Travels Through The Center-West Region Of Brazil
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
During the past week we traveled to the two other states that make up the "center-west" region of Brazil, Mato Grosso do Sul and Goias. The crop situation in those two states is very similar to what we have been reporting from Mato Grosso
Virtually all the early maturing soybeans have already been harvested. The few that have not been harvested are still in the field due to excessive wetness or the farmer may have been waiting for a custom combine crew to harvest the crop.
The yields of the early maturing soybeans were generally less than what had been expected. I saw many early and medium maturing soybeans that were very short, less than knee high, and low yielding, in the range of 20 to 30 bushels per acre. Most of the harvest activity is now focused on the medium maturity soybeans and yield reports indicate that the medium maturing soybeans are about as expected. Many of the medium maturity fields that I looked at were yielding in the range of 40 to 45 bushels per acre. The later maturing soybeans are still green and filling pods and expectations are for better yields from these later soybeans.
The lower than anticipated yields are being attributed to a period of dryness in November and excessive rainfall during December and January. Many farmers commented that they though the lack of sunshine led to "hidden losses" that were not evident until the soybeans were harvested.
Virtually every harvested soybean field is being planted to a second crop of corn or cotton. The safrinha corn can be planted in Mato Grosso until the end of February or early March. Farmers have indicated that they are not loading up the safrinha corn with many inputs (fertilizers) because of the low domestic corn price. They are planting their corn crop with the hope that if the weather cooperates, they might make a little money on the crop.
Custom Harvester In Mato Grosso Working With 21 Combines
In southern Mato Grosso we had an interesting encounter with a crew of custom combiners. We met them at about eleven o'clock in the morning while they were waiting for the soybeans to dry off from the prior day's rainfall. The crew consisted of 21 New Holland combines with support staff. The combines were medium in size and it looked like they had a lot of hours on them. Interestingly enough, the combine operators were brought in from Parana, but the combines themselves stay in Mato Grosso the entire time. Their charge for harvesting the crop is between 1.5 to 2.5% of what is harvested.
There was also a fleet of about a dozen semi trucks waiting for the combines to start harvesting.
The trucking company was also an outside contractor. The soybeans were going to an ADM facility about 25 kilometers away. The field was right aside of the main highway in Mato Grosso, so it would be a short drive to the grain elevator. I can't imagine the transportation problems if the field would have been a hundred kilometers down a dirt road with the amount of rain that has been falling in Mato Grosso. The soybeans themselves had been forward sold to ADM in exchange for production loans at the start of the growing season. It looked like the soybeans they were harvesting would yield about 45 bushels per acre.
We saw many more custom harvesting crews on our travels. In many fields, you would see 10 to 15 combines working in the field at the same time. It was actually kind of rare to see an individual combine in the field by itself (see next story).
Recent Transplants To Mato Grosso Renting Land To Grow Soybeans
On the opposite end of the spectrum from the large custom combine crews we saw working in many fields, we also met a farmer and his wife who were out in the field by themselves harvesting their soybeans. He was running his John Deer Combine and she was operating the farm truck. They were recent transplants from the southern state of Rio Grande do Sul. They had moved to Mato Grosso three years ago and they were renting the land for soybean production.
His rental payment was 8 sacks of soybeans per hectare or 7 bushels per acre. His total cost of production, including land rental, was 40 sacks per hectare or 35 bushels per acre. He estimated that the field he was harvesting would yield 50 sacks per hectare or 43.5 bushels per acre, so he would make a little money on that field. The field he was harvesting was medium maturing soybeans and he stated that his earlier maturing soybeans were lower yielding and he thought that his later maturing soybeans would be higher yielding. One advantage he had was the fact that the grain elevator where his wife was hauling the soybeans was right aside of the field where he was harvesting, so transportation was not an issue at all.
Lack Of On Farm Storage Limits Farmer's Options In Brazil
We traveled about 3,500 kilometers through the heart of soybean production in the center-west region of Brazil and the lack of on-farm storage was strikingly evident. In some areas, it was virtually nonexistent. You could travel many kilometers down the highway with huge soybean fields as far as you could see on both sides of the highway and yet you would never see a grain silo. The only grain storage facilities you would see were at the multinational grain companies (Cargill, Bunge, ADM, Maggi) or at a farm that produced seeds. We traveled through areas where the farms are extremely large, but even so, there were virtually no storage facilities on the farms.
Another difference compared to the Midwest was the lack of farm trucks or grain hauling wagons. What you saw were only semi trucks waiting at the end of the field to haul the grain the multinational grain facilities. This seemed especially odd to me given the fact that freight rates always spike during the harvest season due to the lack of trucks and the soybean prices are usually at their lowest during the harvest season. I did not "do the math", but it would seem to me that an on-farm storage system would pay for it's self in a few years by allowing the farmer to transport his soybeans when the freight rates are lower and the soybean prices are generally higher.
The lack of on farm storage limits the farmers options at harvest. If he doesn't like the price being offered by the local multinational grain company, what is he going to do? The lack of transportation options, insufficient infrastructure, and limited marketing options are real limiting factors in Brazilian soybean production.