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Corn+Soybean Digest

Decisions, Decisions, Decisions

Farmers around the town of Primavera do Leste, typically the first in the nation to get their beans in the ground — in order to get a double crop — have already planted. Just about everyone else here is waiting a little longer, though, and thinking of cutting back on soybeans this year.

Take Mato Grosso farmer Luiz Carlos Scapucin. “With the current lack of credit, we are bound to see a reduction in planted area,” he says. “Everyone in my region is buying less fertilizers and other inputs. That's the main reason for a probable decrease in our state's output this coming harvest,” he says.

Some analysts here are predicting a 3-4% drop in soybean acres planted across Brazil this year, due not only to Scapucin's concerns, but also to a weak dollar (soy prices here are dollar-based) and uninspiring Chicago prices. However, those acres could actually yield an increase in overall production.

Meanwhile, as farmers plan their plantings this year, many of them are still holding onto a lot of last year's soybeans. In the state of Paraná alone, about 30% of the state's harvest last year lies in storage.

Another sign Brazilian farmers may be planting less soy this season is in a report by the National Agricultural Council citing a reduction 19% in demand for seasonal hired agricultural labor during the first seven months of 2005. Those are farm workers spreading lime, clearing fields and otherwise getting things ready for the upcoming season.

Meanwhile, the Mato Grosso Seedsmen Association is predicting lower seed sales this year in that state, due to a shortage of government loans and frustration with the soy picture in general. And as if that weren't enough proof, statistics from the National Fertilizer Spreading Association indicate fertilizer sales nationally are down almost 25% from the same period last year. And in the drought-stricken state of Rio Grande do Sul, fertilizer sales are down by 40%.

In spite of lower plantings, at least two industry groups are predicting a bigger Brazilian harvest this time around.

Severe drought in the south of Brazil and heavy rainfalls at harvest in Mato Grosso hurt yields. Assuming better weather this year, total production could rise by 3% or more, in spite of lower plantings.

Who says international pressure doesn't affect local action? A series of articles in leading U.S. and European publications blaming rainforest devastation in Brazil on soybean production has lead to at least one symbolic step.

Farmers in Mato Grosso state want an “environmental seal” on their beans. The seal would indicate the soybeans were grown under proper worker legislation and obeying environmental laws — including setting aside 20-80% of any given property to natural growth, depending on the region.

Members of Aprosoja, a sort of counterpart to the American Soybean Association in the U.S., declared their desire to demonstrate “social responsibility” in soybean production. But will European, Japanese and Chinese buyers seek out soybeans with the label? Only time will tell. Meanwhile farmers like Scapucin wait for the spring rains, and think about corn.

About 1.5 billion bushels of soy are produced by no-till here in Brazil, which makes Roundup Ready soy — now legal — all the more interesting for producers to try. According to one news report, total no-till acres (for all crops) in Brazil in 1992 were about 250,000 acres. But with a growth rate of between 8-10% a year since then, total no-till acres today are estimated at about 56 million acres.

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