South America Calling

This week, my series on Brazil's storage issues is being published.

The focus is very much on the challenges the lack of storage creates in the growing Cerrado farm regions and the movement among farmers to construct silos there. (See Brazil Storage Struggles in Recent Feature Articles)

Of course, there is more to Brazilian farming than the Cerrado. In the agricultural heartlands of the south, where cooperatives have been established for decades, there is ample storage space and resources to expand.

One example is Coopavel. The cooperative was set up in Cascavel, western Parana, back in 1970. It has silos for 700,000 metric tons, more than sufficient for the soybeans and corn it receives from an 80-mile radius around the headquarters each year. But it is looking to expand another 20% over the next few years.

With farming in the south dominated by small-scale producers, there aren't many looking to access the Brazilian government's new $10 billion credit line to build on-farm silos.

"There are some of the larger operators with 1,500 to 2,000 hectares (3,700 to 4,900 acres) who are making arrangements, but not many," said Acir Palaoro, the cooperative's units manager.

As I highlight in the stories, it is really the growth of second-crop corn in the center-west that has brought the storage crisis to a head. The ability to produce high-yielding corn immediately after soybeans is concentrating output in areas such as Mato Grosso, which was already struggling to deal with its massive soybean crop.

Of course, corn exposes logistical shortcomings, because it has a lower per-ton value compared with soybeans.

Alastair Stewart can be reached at Alastair.stewart@telventdtn.com

(ES)

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