Brazil Soybeans: Record Production due to Increased Planting Prospects
The USDA forecasts Brazil’s 2013/14 soybean production at a record 88.0 million tons, up 3.0 million tons or 3.5 percent from last month and up 6.0 million tons or 7 percent from last year.
Harvested 2013/14 soybean area is forecast at a record 28.9 million hectares, up 0.65 million hectares from last month and up 1.2 million hectares or 4.3 percent from last year. Soybean yield is forecast at 3.04 tons per hectare, an increase of less than 1 percent from last month and close to trend yield.
Brazilian farmers are expected to increase soybean area by 4.3 percent because of higher expected profits. The Brazilian real has declined in value relative to the U.S. dollar about 16 to 19 percent in the past 6 months. Depreciation results in higher values for exported soybeans which are sold on the global market. On the other hand, the prices of imported inputs such as fertilizers and insecticides are expected to increase. Price increases for urea have been reported but potash prices have fallen. The increases in input prices are lower than the increases in the value of the soybeans in real terms and higher profits are expected.
Brazilian soybean farmers have been steadily increasing soybean area by converting Cerrado (savannah) and pasture in central Brazil. Brazil’s soybean area has almost tripled since 1990/91 when area was 9.75 million hectares. Brazil’s soybean area has had double-digit percent increases in 1997/98, 2001/02, 2002/03, 2003/04 and last year.
This year’s increase of 4.3 percent is smaller than last year’s increase of 10.8 percent and smaller than the record increase of 17.3 percent in 2001/02. The majority of the soybean area increase has been in the Cerrado (savannah) which is a large tropical savannah region in central Brazil.
Soybean planting begins in mid-September in most parts of the country. Most of the Brazilian states abide by the anti-rust consortium’s planting recommendations. These are fallow periods of either 60 or 90 days where farmers agree not to plant soybeans. This rule minimizes the inoculum for Asiatic Soybean Rust; the rust spore can survive about 50 days. In Mato Grosso—Brazil’s leading soybean-producing state—soybean planting can begin after September 15 but usually starts in October after the rainy season has started. Planting early does not guarantee a yield boost for farmers. Planting soybeans early however, allows an earlier soybean harvest which is beneficial for planting second-crop corn.
Current USDA area and production estimates for grains and other agricultural commodities are available on IPAD's Agricultural Production page or at PSD Online.