Brazil: Fewer corn acres or less investment?

Wild weather patterns could mean fewer second-crop corn acres planted this month.

Where’s Goldilocks when you need her? Mato Grosso farmers this season have been whipsawed between too dry, which delayed soybean planting, and too wet, which meant lots of replanting. But they never found that just right place where everything goes according to plan.

That’s one thing, of course, for the 2015-16 soybeans crop. But the knock-on effect on this season’s second-crop corn comes as a direct consequence of that.

Not only does about one in every three rows of Brazil’s beans come from Mato Grosso, but the state’s farmers are also tops in second-crop corn. They need the rotation for agronomic reasons, and will often plant a second crop of corn in February even if they know it’s going to end up selling for only a couple of bucks per bushel.

The latest spot price from Nova Mutum, Mato Grosso, puts corn at a friendly US $6.60 per bushel. But estimated production costs for a full package of inputs, land and so forth, has been estimated at around $266 per acre. That’s with an estimated Mato Grosso yield this time around of 92 bushels per acre.

Fewer acres or lower inputs?

When I first started traveling Brazil in the 1980s, cornfields were about as ugly as a last-minute prom date. Nothing like the Illinois corn I detasseled through high school. The rows varied in width and height, and were bug-eaten and frayed.

But corn—at least in Brazil’s South, near the pork and poultry production—was generally a money-loser. You followed beans with corn for rotational purposes, but not because you were going to make money. However, internal demand for Brazilian corn has shot up, with exports now draining supply from the domestic demand. And it’s not like domestic demand is weak: Brazil is now a top producer of broilers and pork despite relatively little feeding of cattle.

So these days the question isn’t whether you’ll plant corn as a second crop—if for no other reason than to maximize your soybean production, whose value is effectively tied to the value of the dollar. The question is how much you are going to spend on that corn—especially when inputs are ever more costly.

My guess

You save money on your second-crop corn by either planting fewer acres of it, or by planting it and then following up with a minimum of inputs. Despite the fact that, for Mato Grosso producers, anyway, this has been anything but a normal El Nino year, I’m guessing they won’t cut second-crop corn acres so much as they’ll cut cropping costs. And reductions in cropping costs almost always lead to yield losses.

The opinions of the author are not necessarily those of Farm Futures or Penton Agriculture.

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