Jun 24, 2010
Soybean Acreage in Mato Grosso Could be Down 2% in 2010/11
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
The first survey of farmers in Mato Grosso conducted by the Mato Grosso Institute of Agriculture Economics (Imea) indicates that they intend to reduce their soybean acreage for the 2010/11 growing season which will start later in September. The survey points to a reduction of 2% in soybean acreage from 6.21 million hectares planted during last growing season to 6.09 million hectares expected to be planted in 2010/11.
Going into the last growing season, soybean prices were much better and the early onset of the rainy season encouraged many farmers to increase their soybean acreage. Unfortunately, the heavy rains continued right through the growing season resulting in the lowest yields in three years and an increased incidence of soybean rust. Some farmers in Mato Grosso doubled the number of fungicide applications in order to adequately control the disease. The increased cost, coupled with lower soybean prices and a stronger Brazilian currency, left many farmers with very thin profit margins if any at all.
According to Glauber Silveira, president of the Soybean and Corn Association of Mato Grosso, farmers in the state may switch some of their soybean acreage to additional cotton production due to the improved cotton prices or they may focus their soybean production only on their more productive land where costs are lower.
A continued lack of credit is also an ongoing problem in Mato Grosso. After the worldwide economic slowdown, the multinational grain companies decided to cut back on the amount of credit they offered to their farmer clients. During the 2008/09 growing season, the multinational grain companies provided 50% of the credit needed to grow the Mato Grosso soybean crop. That dropped to 35% during the 2009/10 growing season and it is expected to fall even further to 25% for the 2010/11 growing season.
With cut backs in the amount of credit offered by the grain companies, farmers were forced to rely more on their own resources to finance the crop. During the 2008/09 growing season they were 22% auto financed. That increased to 34% in 2009/10 and it is expected to be 37% in 2010/11. Imea estimates that 65% of the fertilizers for the next growing season have already been purchased.