Apr 06, 2010
Brazil's <i>Safrinha</i> Corn Crop Getting Bigger
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Data released last week by the Mato Grosso Institute of Agricultural Economics indicate that farmers in the state planted even more safrinha corn than previously estimated. The institute now estimates that 2.0 million hectares of safrinha corn was planted, which would be 19% more than the 1.6 million hectares planted in 2008-09. (Conab is still estimating the safrinha corn acreage in the state at 1.55 million hectares.) The institute increased its estimate of the average yield for the safrinha crop in the state to 4,773 kg/ha (73.5 bu/ac), which would be less than the 5,074 kg/ha (78 bu/ac) recorded in 2009. With the increase in acreage, the safrinha corn crop in Mato Grosso could reach 9 million tons vs. the 8.5 million produced in 2009.
Productivity is not the main issue facing corn producers in Brazil in 2010, its profitability. The institute also announced that 3 million tons of corn is still being stored in Mato Grosso awaiting buyers. The cash price for corn in the state has fallen to as low as R$ 6.50 to R$ 7.00 per sack compared to the minimum price set by the government of R$ 13.95 per sack. But, in order to receive the minimum price, the corn must be sold to the government. The government purchased approximately 80% of the corn produced in the state last year and if the farmers had their way, that percentage would be even higher in 2010.
One of the reasons why the silos in Mato Grosso are still full of last year's corn is because of the high cost of transporting the corn out of the state. At the current depressed prices for corn in Mato Grosso, transporting the corn to the Port of Paranagua would cost more than the cash price of the corn.
More and more safrinha corn is also being grown in the states as well such as Goias and Parana. For the first time this year, the farmers in Goias will grow more acres of safrinha corn than full-season corn. In Parana, the safrinha corn acreage in 2009-10 declined to 1.3 million hectares from the 1.5 million hectares planted last year, but the total production is expected to be 32% larger than last year due to a severe drought that impacted last year's crop.
Storage of all this safrinha corn is going to be a big problem in Brazil and without a doubt; some of this corn is going to be piled on the ground. The depressed domestic corn prices will probably convince Brazilian farmers to cut back even further on their full-season corn acreage in favor of more soybean production. But, Brazilian farmers will also have to cut their production costs if they hope to make any money growing soybeans in 2010-11. That means cutting back on seed costs, and reducing the amount of fertilizers and chemicals used on the crop.