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As the U.S. crop season prepares to end, Brazilian farmers prepare for a new crop season. Right now, early planting decisions are for more corn in southern Brazil and less of that grain in the larger-farm area of center-west states. MORE CORN IN SOUTHERN STATES One of the best events in Brazil to give a better picture of what will happen with this upcoming corn and soybean year is the Expointer. Held in Rio Grande do Sul, the state that pioneered grain production, the largest outdoor farm show in Latin America is the main stage for machinery sales, animal trade, competitions, and direct marketing. It is also an opportunity for urban populations to encounter some unknown aspects of rural production. Other than urban people investing in olives or vineyards in the state, the 2016 version of Expointer revealed also a recovery of machinery sales, a good scenario for investment in livestock, and the perspective of strong growth for corn in southern Brazil with a modest growth of soybean surface. This shifts the attention of grain production gradually from the center-west part of the country back to the south. State agencies project a growth of 17% of the surface of corn in Paraná and 10% in Rio Grande do Sul, while the crop would be flat in Mato Grosso and other center-west states. The intentions are pushed by the profits of the current crop. It may be still early to tell, but some say that the corn prices, if continued strong, could also boost the second corn crop acreage in center-west states. “I think there is a strong possibility of that happening. We are starting with a campaign to push sorghum production as a replacement for corn. It is cheaper and easier to produce. There will be strong production of that, but it still will be small. It is something that will be talked about more and more in the future,” said Alysson Paolinelli, president of the Association of Corn Growers of Brazil (Abramilho) and former agriculture minister of the country. LESS CORN FROM BIG FARMERS The problems in the center-west states range from weather, as the drought that generated 40% of corn losses recently in Goiás, high taxations as in the cases of Goiás and Mato Grosso do Sul, and high logistical costs in all parts of the region. “The state of Mato Grosso has been stagnated in terms of yields in the last 15 years. It is time to review our agricultural practices and to seek lower costs,” says Endrigo Dalcin, president of the Soybean Growers Association of Mato Grosso. According to José Eloir Denardin, a reseacher of the soils division of the National Agricultural Research Company (Embrapa), Mato Grosso has lagged behind other states in terms of yields in both corn and soybeans. “In the last 15 years, we have seen a constant, though a slow improvement of soybean yields in Paraná and Rio Grande do Sul, while the Mato Grosso remained flat, below the national average, with 49 bags per hectare (43.6 bushels per acre). We have a lot of work in terms of soil management in Mato Grosso,” explained Denardin. Pedro Duarte Magalhães left Rio Grande do Sul in 1992 seeking more land in Mato Grosso. He is an owner of nearly 2,300 acres in Rondonópolis, MT, where he plants soybeans in the summer and corn in the winter. After eight years away from his origin state, he was impressed with some profits he was hearing about from his colleagues. “In Mato Grosso, the costs are sky-high. I had two crops combined without seeing real profits, while farmers here told me the opposite happens with them. The truth is that if you don’t have enough scale, you are dead in the center-west. Maybe my decision was wrong over 20 years ago. Those opportunities were a mirage. That’s why those acres were so cheap then. I’m not so sure I’ll be able to buy a Massey Ferguson tractor this year,” Magalhães told Agriculture.com. Fábio Donizetti dos Santos went to the farm show to check for new technologies. He said all his neighbors are looking to get back to corn, buying new pivots, but he will stick with soybeans because his land is too small (123 acres) to be against the tide. “I’ve made an order of an Edinor 80-hp. tractor from LS (a Korean company). I hope to get my yields higher and to make my work more efficient. I hope the bank approves the credit loan,” he told Agriculture.com. Credit access has been difficult for farmers in the last two years because of the economic recession. Despite the optimism, there is something that farmers in the state of Rio Grande do Sul (southern Brazil) should worry about. The latest crop with significant corn acreage here was in 2012, when a drought generated losses of billions of dollars and caused farmers to avoid planting it the following year. Now, there is a 2017 forecast of La Niña with a high risk of losses during the crop, and most farmers grow dryland corn. “I don’t believe in major investments in irrigation because the bureaucracy and the cost to do an irrigation system in Rio Grande do Sul is too high. [...] We’re coming from a crop with record costs, and these costs may be beaten again,” analyzed Antonio da Luz, chief economist at the Federation of Agricultural and Livestock of Rio Grande do Sul (Farsul). MACHINERY SALES At the end of the Expointer 2016, the machinery sales reached a total of R$1.9 billion, which is 12.5% higher than 2015. The number is considered very positive for the Brazilian industry, which has been hurt the most by the recession. Korean Company LS Mitron announced an investment of US$40 million for an expansion of its factory in the neighboring state of Santa Catarina. The company, which so far has aimed for family farmers, will now try to beat the odds and target bigger farmers. The investment was possible because the company grew at a rate of 15% in the first half of 2016, while most companies saw a sales drop. “We will work in new models of tractors with over 100 hp., and this will require us to expand the structure we have today – from the building of the factory to hiring new workers,” announced LS Tractor president Kyung Woo. MORE SORGHUM Alysson Paolinelli, the president of Abramilho, also told Agriculture.com that one of the major goals of the official trip of Brazil’s new president, Michel Temer, and the country’s Agriculture minister, Blairo Maggi, is to close deals that eliminate phytosanitary barriers to export some grains, and sorghum may be one of the priorities. “Currently, Argentina exports a lot of sorghum, and we also want to do it. It works as a replacement for corn and is used for beverages in China. It is very cheap and there is an ideal soil in the border of Brazil with Uruguay. It will not be a fast boom, but in the future, we will a see a lot more sorghum,” revealed Paolinelli. The countries currently allowed to export sorghum to China are Argentina, the U.S., Australia, and Myanmar. |
