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: United States
Corn+Soybean Digest

Soybean Acres Down 5-10%

Estimates of planting intentions for Brazil by both the U.S. and the Brazilian governments have been lowered this year.

Severe drought beat up farmers in the south last year, leaving some without funds to plant at all this year. Rust has shown up earlier than usual this year, too. Due to these factors, non-government observers estimate soy planting to be down anywhere from 5% to 10%.

Financing to get the crop in is short, and low-cost financing is really important in a country where interest rates at private banks are among the highest in the world. Farmers are planting less of everything, and many are saying they will switch some soybean acres over to another crop, often rice.

The national association representing the fertilizer industry in Brazil says sales of all fertilizers from January to August were down 21%, compared to the same period last year. In some of the key soybean-producing areas, fertilizer sales are guessed to be down by more than 35%.

Adding to the problem is the low value of the U.S. dollar internationally (the U.S. dollar to Brazilian Real exchange rate recently hit its lowest point since 2001) at the same time oil prices have been hovering at or near record highs. It takes a lot of fuel to get inputs out to many Brazilian farms, raising costs. And soybean prices are set in Chicago, which means that when the dollar goes down, so does a Brazilian soybean producer's income.

And it's not just producers who are complaining. A Bunge spokesman — Bunge has more than a dozen crushing facilities across the country — says the company might shut down two of its 12 crushing plants in Brazil and move them to Argentina. He told the media that logistical bottlenecks, high taxes and the falling dollar are hurting profits. “Surely,” he says, “this is one of the worst times for agribusiness in the last 10 years.” And, in fact, the head of the crushing industry association in Brazil blames the exchange rate on negative margins across the board for the industry.

Brazil's soybean headaches don't end there. After a Brazilian government agency estimated that rainforest devastation is on the rise — and news that an area the size of Belgium (a little larger than New Jersey) is being cleared annually — a rash of articles in European and U.S. publications, like the Washington Post, linked rainforest devastation with soybean expansion in Brazil. A bad environmental image is not good for European sales, or for foreign investment in general.

As a result, at least one group representing soybean farmers here, called Aprosoja, has started talks with the government of Mato Grosso, Brazil's biggest soy-growing state, to “show our interest in working as partners in (state) government efforts for development of the agricultural sector with social and environmental responsibility,” says Aprosoja president, Rui Prado.

One way to do that, he indicated, would be to set up a system to certify that farms in the state were following all labor and environmental laws on the books. And the laws on Brazil's books concerning the environment are pretty tough.

That promise, for those who abide by it, would mean at least a 20% permanent set-aside for the Cerrado areas, and an up to 80% permanent set-aside for areas truly in the Amazon jungle, among other things. There was no word on how soybeans grown on certified farms would be separated from all the other soybeans coming out of Brazil.

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.