Soybean sowing in Brazil is currently almost complete. Despite the fact that prices are at a low level, the acreage is steadily expanding. However, the differences per state are large and logistical challenges and the climate are also determining factors for arable farmers.
According to Brazilian marketing agency AgRural, 96% of all soybeans had been sown by mid-December. That is slightly more than last year. The 5-year average is 93%. However, it is difficult to talk about 'Brazil'. Every area in the gigantic country has its own challenges.
Area increase
The area for 2017/2018 is estimated at 34,6 million hectares. That was 33,9 million hectares last season. According to an initial estimate, the total harvest is 109,9 million tons. In the 2016/2017 season, the harvest amounted to 114 million tons. The current and past seasons are therefore tops in Brazilian history. The country grows about 30% of all soy worldwide. Neighboring country Argentina accounts for about 18%.
The Central-Western region is one of the 1 regions in Brazil and the most important growing area for soybeans. The area contains the states of Mato Grosso, Mato Grosso do Sul, Goiás and the Federal District. In the 5/2016 season, these states produced 2017 million tons of soy.
late season
Goiás is the 4th largest soy state in the country. This state is most affected by drought damage and delayed sowing. According to Antonio Chavaglia, chairman of the Comigo cooperative (with 6.800 affiliated arable farmers), the crops are now in good shape. "Sowing work has been delayed, but we have now had enough rain," he told the American Successful Farming.
Problems with diseases are not too bad. "Nevertheless, we think that the yield will be lower. The weather is favorable for crop development, but due to the late sowing time, we expect the harvest to start later. This may cause problems with grain maize. If it becomes too late for this, then switch growers are switching to sorghum," said Chavaglia.
Logistic problems
Chavaglia thinks that 20% of the soy for the 2017/2018 season has been sold. "The prices are below those of last year. Bags of 60 kilos are sold between 64 and 65 real, the equivalent of more than $19. A normal price is 70 real per bag, which is $21,18." Arable farmers who rent land in particular have problems keeping their heads above water.
About 30% of the cooperative members at Comigo are tenants. “Soy yields cover the land costs, but not the crop costs,” Chavaglia said. "Transport is a big problem for us. Freight costs fluctuate considerably, making good planning difficult. Last year transport cost 200 real ($60,50) per ton, while 150 real per ton is a fair price."
South is more positive
The southern states of Paraná, Santa Catarina and Rio Grande do Sul are in a more favorable position. These 3 states together account for 40,5 million tons. The crops in Paraná, the second largest soy state, are in good shape for the new season. However, a slightly lower yield is also expected here. An initial estimate is -1%. "Last year the weather was perfect, which resulted in an exceptionally good harvest," says Dilvo Grolli. He is chairman of Coopavel, a cooperative of 5 arable farmers, poultry farmers and pig farmers in Paraná. "Farmers know that they will find it difficult to match this result."
According to Grolli, the biggest concern now is the state's climate. During the sowing season in September it was very dry, followed by extreme rainfall. "In November it rained as much as 700 millimeters in some places, with 300 to 400 millimeters being normal," Grolli said. "We see a La Niña developing, but it is still very weak. The climate phenomenon may make it drier, causing production to drop."
Good price
The financial situation of farmers in the southern states is slightly better. "The cultivation costs of soybeans are around 2.200 real per hectare, equivalent to $666," Grolli says. "With a production of 3,6 tons per hectare, the costs amount to 36 to 38 real per bag of 60 kilos. The price is currently above 60 real. Growers are thinking of recent prices of 80 real or more. 65 real seems little, but that is relative. The financial situation therefore looks good."
He recognizes the difficult position that growers in the Midwest find themselves in. The states are too far from the ports, diesel is becoming more expensive and transport costs are rising. This cost increase is paid from the farmer's pocket.
less corn
Members of the Coopavel cooperative sold about 2017% of their product for the 2018/65 harvest. Last year that level was around 75%. Prices are closely monitored. "Growers in Paraná are financially stronger and watch the weather closely. They are therefore waiting for better prices," says Grolli.
Logistics in the state are also better organized. The asphalt roads to the ports are good. Internal demand is good, just like that of corn. Yet the chairman expects that 30% less corn will be sown. "If you harvest too late, you miss the ideal moment for sowing the corn. As an alternative, you fall back on wheat."