Farm Progress is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Serving: East
Corn+Soybean Digest

Behind The Numbers

Just as you are harvesting, farmers in South America are planting. In Brazil, the process of figuring out how much of what to plant in September and October usually begins in June. In most of Brazil, winter is marked by lack of rain rather than by cold temperatures and snow. It's in the midst of the dry season that most producers buy their seed, which in turn dictates input purchases.

The Brazilian government predicts Brazil will produce 42 mmt of soybeans this year (or 1.543 billion bu.), representing a 22% increase over last year. Part of that increase, if it happens, will come from farmers in the central-western Brazilian state of Goiás.

“The first consideration in deciding what to plant is price. Not the price today, but the futures prices,” says agronomist Carlos Alberto Alleoni, who consults for farmers on three properties, totaling 32,500 acres in the state of Goiás.

His farms average 55-60 sacas per hectare (49-53 bu./acre) of soybeans. “But price is not the only consideration,” he adds. “Soybeans are easy to market and there is an ample network of storage facilities” in the area. Alleoni says his clients typically sell about half their harvest before the combines go into the fields.

The fact that soybean prices are set internationally, in dollars in Chicago, often helps skew a Brazilian farmer's calculations in that direction during decision time in June. Farmers here are paid, of course, in local currency. But the amount of local currency they receive is directly related to Chicago prices.

Broadly, soybeans are dollars. And that's often important in a country where the local currency usually loses value against the greenback. Farmers here normally cite the number of bags (they use 60 kg bags rather than bushels as the standard unit of soybeans) they paid for a combine. Land is often rented based on bags per hectare.

Another factor in favor of soybeans is cost of production. “Soybeans give me more liquidity,” says Vicente José Mantelle, who farms 4,400 acres, also in Goiás. “I get better cash flow and more money in my hands.”

Mantelle, who averages 53 sacas of soybeans per hectare (47 bu/acre), decided back in June to plant 4,000 acres to soybeans in this year's first harvest, with the rest to corn.

Given the long growing season, farmers in Goiás can get in two harvests each year, as long as the dry season doesn't set in too early.

The second harvest period usually doesn't last long enough for a second crop of beans, although some farmers manage to get two bean crops in using early varieties. So Mantelle's main planting of mostly soybeans will be followed by a mix of corn and sorghum planted in early February.

Corn prices and plantings in Brazil are volatile. This year, the government says corn production will increase 85% even though planted area should be only about the same, after last year's poor harvest. As a result, many producers including Mantelle, are betting on low corn prices, which could mean greater soy plantings in Brazil this year.

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.