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Hobbyfarmer
Honored Advisor

I think they can break us

Before, we break them...

 

Brazil Crop Outlook - 2

 

 

By Alastair Stewart
DTN South America Correspondent

SAO PAULO, Brazil (DTN) -- Brazil will plant more corn than ever before in 2015-16, despite depressed international prices.

But record production is not yet assured with weather risks accentuated in the Cerrado this season.

"Farmers will be planting a lot of corn. We are praying there will be enough rain for it, though," said Osmar Frizzo, vice-president of the farm union in Querencia, a municipality in eastern Mato Grosso.

With harvesting around 40% complete, the summer corn crop appears to be a bumper one with southern fields returning early yields of 140 to 160 bushels per acre.

Crops also look good in the southeast and, as a result, the first crop is pegged at around 28 million metric tons (mmt). That's down 5% from last year, but planted area was down 7%.

The decline in summer planting has become a trend in recent years as more and more farmers instead plant second-crop corn after soybeans.

For a while last year, however, it was uncertain that second-crop corn area would grow markedly in 2015-16 due to a lack of credit and depressed international prices.

But strong international demand prompted heavy forward sales, while the devaluation of the Brazilian real made margins attractive.

As a result, second-crop corn area will increase more than 10% this season to over 26 million acres.

Delays to soybean harvesting have pushed back second-crop corn planting in the top-producing Cerrado region. That's bad news as corn has to go through key reproductive phases before April when summer rains typically give way to the dry Center-West Region winter.

In regions like northern and eastern Mato Grosso, the delays mean farmers will plant a portion of the crop outside the optimal window.

But farmers will plant anyway as they have already committed to sell a large portion of the crop.

Elsewhere, growers have made a major effort to plant before the optimal window closes at the end of February.

As a result, overall second-crop corn planting is actually a little ahead of last year. According to Safras e Mercado, a local farm consultancy, about 86% of projected second-crop land was planted as of March 4, up from 80% last year.

However, most of that corn was planted in the latter part of the optimal window, and the big question now is whether late-summer rains will be as abundant as they have been over the past two years.

The hope is that because rains arrived later in October, they will go on later, explained Carlos Alberto Petter, who farms 2,750 acres in Nova Xavantina, a municipality in eastern Mato Grosso.

Unfortunately, long-term weather models don't predict that, instead forecasting a mid-April end to the rain. The good news is that there is, as yet, no indication of a surge in La Nina activity that might increase the threat of winter fronts in Parana.

Meanwhile, January fertilizer delivery figures indicate that farmers may not be lavishing fields with NPK, but are investing in second-crop production. According to the Brazilian Fertilizer Distributors Association (ANDA), January deliveries were up 4% on the year at 2.1 mmt.

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10 Replies
BA Deere
Honored Advisor

Re: I think they can break us

That`s the heck of it, everywhere but the real fringe areas the land cost is fixed whether it`s farmed or not.   If they farm it they might lose a little of maybe make, but the land cost is what it is and constant so laying idle, it`ll lose alot. 

 

Seed companies give them a sweetheart deal, input suppliers let them pay in bags of grain. So they probably don`t need the knee pads to see the banker as much as some around here.   It`d be nice if our country manipulated the currency as the rest of the world does for our bennefit for a change.

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hardnox
Advisor

Re: I think they can break us

We're perfectly competitive except for the land cost.

 

An interesting consideration on capitalism there, or more specifically neoliberalism.

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sw363535
Honored Advisor

Re: I think they can break us

Makes you wonder if the rest of the world viewed us the same way in the early 1900's.....

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BA Deere
Honored Advisor

Re: I think they can break us

What you hear anyway, is Brazilian land that`s developed and not way out in the boonies is pretty high priced.  With their currency manipulation of the Real, they had a pretty good 2015, they were probably selling beans for what would be for us $11/bu, so they haven`t been pinched yet.

 

15-20 years ago some farmers went down there are reported back that Brazil farmers combine their beans wet and use that scrub brush to fuel their driers.  Haven`t heard anymore about that, maybe their beans these days dry in the field better? 

 

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roarintiger1
Honored Advisor

Re: I think they can break us

Has anyone stopped to thank our American large grain companies, seed companies, chemical companies, and machinery companies for expanding into Brazil and cutting the American farmers' profits?  Can't really blame them for chasing the almighty dollar, but things sure would be different for American agriculture if they wouldn't have pursued those dollars in that part of the world.   Smiley Wink

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BF2012
Advisor

You really think

that they are paying the same prices for inputs especially seed, chemicals and fertilizer that we are?  lmao.  Just like the pharmaceutical industry...Their inputs are probably 40% cheaper than ours.

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Hobbyfarmer
Honored Advisor

Re: You really think

Spoiler
 

I have no clue about seed corn there, but what % of heir seed beans are saved and cleaned from the previous harvest or the neighbor down the trail? 

 

$50 to $60 for 130 to 140,000 seeds in an eight dollar retail commodity market doesn't fly down there. Really not sure why we are all lambs to slaughter here.

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hardnox
Advisor

Re: You really think

For all the complaints against the gubmint lodged here I've never gotten a taker on the proposition that the gubmint is remiss in not investigating price fixing in those industries.

 

Although those aren't easy to press- in the ADM case that was successfully prosecuted they had an informant.

 

I'd guess it doesn't even necessarily require overt collusion once the ownership becomes concentrated enough. They're more like classic price leader oligopolies.

 

But, you know- "efficiency" and "the free market".

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BF2012
Advisor

Informants

you mean like all of those whitleblowers who are pushing up daisies.  There.  Answered that question.

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