March 11, 2010

Safrinha Corn Planting Complete In Mato Grosso

Farmers in Mato Grosso have completed the planting of their 2010 safrinha corn crop. The Mato Grosso Institute of Agricultural Economics estimates that they planted 1.77 million hectares of safrinha corn. In Conab's March report, they estimated that 1.55 million hectares of safrinha corn was planted in the state. Conab also estimates that the average yield for the safrinha corn crop in Mato Grosso will be 4,609 kg/ha (71 bu/ac) and that the state will produce 7.1 million tons of safrinha corn. Approximately 95% of the corn produced in Mato Grosso is safrinha corn planted as a second crop after the soybeans are harvested.

In addition to worrying about the weather, pests and diseases, this year the primary concern is the low price of corn in the state. Statewide, the average cash price for corn is currently R$ 7.65 per sack or approximately US$ 2.15 per bushel. In March of 2009, the average cash price for corn in Mato Grosso was R$ 13.20 per sack or approximately US$ 3.70 a bushel. In areas of the state where the silos are still filled with last year's corn, the prices are even lower.

Cash prices last year were below the minimum price set by the government, so farmers were reluctant to sell into the cash market preferring to sell their corn to the government. The Brazilian government has been very slow to purchase the corn, which has resulted in a large carry over of last year's crop. At the current prices, farmers will be even more reluctant to sell into the cash market. As a result, storage space is going to be inadequate to handle the crop and some of the safrinha corn will end up being piled on the ground.

In southern Brazil, cash prices for corn are much better. In the state of Sao Paulo, corn is selling for R$ 15.40 per sack (US$ 4.25 per bushel), in Rio Grande do Sul it is R$ 15.11 per sack (US$ 4.19 per bushel), and in Parana it is R$ 14.23 per sack (US$ 3.95 per bushel).