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02-09-2011 09:54 PM - edited 02-09-2011 10:12 PM
You guys/gals don't seem to need me for the market to go to the moon. Wow! What a market since I left the country. I'll schedule another trip as soon as I return from this one, for your benefit. I have to admit that it is nice to get out to the farm level for awhile. Anywho, here is a photo representing what I'm seeing a lot of in Brazil's No. 2 soybean-producing state.....Continued rain! Looks light, but turned into a gusher quickly.
So far, the Brazilian trip has been very educational, regarding their farm economy, agronomic practices, and marketing decisions. Let's bring you up to speed as to what I'm finding out.
Last things first, since some new news is fresh in my mind. It's Wednesday, and it has been raining like 'cats and dogs' down here. I'm referring to heavy rain in the state of Parana. However, I talked to a farmer north of here, in Goias, and he says it's a dry week there.
But, here's the new development I discovered Wednesday. A harvest train wreck may be heading this way. Parana, the No. 2 soybean-producing state, has a crop that is maturing late, due to late planting and cold weather that followed. Add to that, the heavy rains are delaying the harvest for the early soybean varieties that are harvest-ready.
At the EMBRAPA headquarters, in Londrina, where we visited Wednesday, I found that total rainfall for Dec., Jan. and six days of Feb. amounts to 17 inches of rain. But, I swear, today alone, we saw another 2 inches maybe more fall. That 17 inches is below a 20-inch average for those same months. But, it's early in February and it just keeps raining here. In fact, the local farmers say it's not the amount of rain, but the constant rain events that is bothersome.
Let's breakdown the harvest delays: For Mato Grosso, the No. 1 soy producing state, as of the end of January has only 2.8% of soybeans harvested vs. 9.9% last year. For Parana, 1% of the soy is harvested vs. 17% by the end of February last year. And these Parana farmers will not be getting in the field anytime soon, let me tell you. For corn, Parana farmers had 2% of the corn harvested last year, at this time. They harvested 23%, last year, by the end of February. So, a delay is underway.
The early and late soybean varieties are going to be harvested near each other. Some farmers are not worried, yet. However, others are real worried about everybody trying to bring this crop to market at the same time. Traffic to ports will be miles long, if they can find enough trucks at all. Some farmers that rent combines will be competing with their neighbors for that same piece of equipment. If the ports get flooded with traffic they could just shutdown and export contract agreements may not be met.
Keep in mind, this isn't me talking, it's what the Brazilian ag sector folks are telling us.
Anyway, enough on that. Marketwise, these farmers are sold way ahead of previous years. I've talked to farmers that are 30% sold out on new crop, and others that are 42% and 30% sold. The president of the largest farmer cooperative in Latin America says his 22,600 farmers are 30% sold on new crop, whereas they normally are only 15% sold at this point.
In earlier reports, I mentioned how the general attitude of Brazilian farmers is positive.
Agronomically, Brazil's farmers are being educated on how to improve their insect management plans. Weed resistance is a popular topic. Tank mixing is really being discouraged. Instead of spraying according to the calendar, experts are telling these farmers to spray according to thresholds.
By the way, did you know that Brazilian farmers are up-to-their ears in wheat? Some farmers are sitting on two years worth of wheat. The price they are offered for it on the export market is worthless, they say. What I'm gathering, the wheat is poorer quality than the world buyers are looking for.
Social programs for farmers are going over like gang busters. These farmers are really learning how to belly up to the government trough. Smaller farmers are able to upgrade equipment, improve technology skills, etc.
You're reading this reporter's notebook, so to speak. I'll have further details on many of these topics.
It rained heavily yesterday, in the state of Parana. Harvest activity will definitely be delayed here for the next few days. I am learning that for southern Brazil, smaller engine tractor sales are the hottest. The government has a social program that is helping these smaller farmers upgrade.
What questions do any of you have that I can ask these farmers or the officials here?
02-10-2011 06:29 AM
MIke thanks for the info as to questions later on when you talk to the minister of ag.
1. How are they encouraging the expansion of the dairy industry in Brazil?
2. What is the outlook for growth in the dairy sector going into the next 5 years.
3. What is preventing them from expanding, Infrastructure in processing, or actual dairy farms?
Many of my industry contacts mention that Brazil could become a major player in the dairy industry by 2025 overwhelming NZ as they have the land base. Many say that roads may be the biggest obstacle going forward.
02-10-2011 11:22 AM
Mike: Good talking with you on the phone this morning. Ten-hour drive to the next stop? Whew!
Here's a link to a page with all of your fine reporting:
Keep up the good work!