Mar 23, 2010
Brazilian Wheat Producers Undecided About 2010 Wheat Acreage
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
As the soybean harvest progresses in southern Brazil, farmers in Parana are already thinking about if they should plant wheat as their winter crop. In northern Parana, safrinha corn is the main "winter" crop, but in central and southern Parana the main crop is wheat and the state of Parana produces about half of Brazil's wheat crop. Wheat has always been a difficult crop to grow in Brazil and the last two years it's been particularly bad. Low prices and harvest delays due to heavy rains have left many farmers wondering if it's worth their effort to grow wheat.
The problem with wheat production in southern Brazil usually occurs during harvest. The wheat harvest generally coincides with the start of the rainy season in southern Brazil. This could also be the hottest time of the year in southern Brazil. The combination of high humidity and high temperatures can quickly deteriorate the quality of the wheat turning it from milling quality to feed quality in a matter of a few weeks. For the last two years, an onset of heavy rains has hampered the wheat harvest resulting in lower yields, lower quality, and lower prices. Approximately half of the wheat produced in Parana last season ended up being feed quality wheat instead of milling quality.
The Brazilian government is adding to the uncertainty of the 2010 wheat crop by proposing new tougher regulations as to what can be considered milling quality wheat. Farmers are concerned that if these new regulations go into affect much of their wheat would be classified as only feed quality and they would not be eligible to any subsidies offered by the government.
In spite of the government's best efforts to promote Brazilian farmers have never been able to produce enough wheat to meet the domestic demand estimated at 12 million tons. In recent years, the quantity of the wheat produces was good, but the quality has been poor. Another problem in Brazil is that the government standards for wheat differ by regions in Brazil and they do not coincide with the standards used by the millers in Brazil.
Conab estimates that 2.4 million hectares of wheat were planted in 2009, which was 1.5% more than in 2008, but the total production declined 14% to 5 million tons due to adverse weather during harvest. Brazil usually fulfills its wheat needs by importing wheat from Argentina, but last year the wheat crop in Argentina was also smaller than the year before forcing Brazil onto the world market to secure the wheat it needed.