South America Calling

Brazil's Soy Season Starts Sunday

Sunday marks the official start of Brazilian soybean season, which, if U.S. Department of Agriculture predictions are to be believed, will yield the world's biggest crop for the second consecutive year.

However, some farmers in the north and east of Mato Grosso have jumped the gun and are already planting, despite the lack of substantial rains and the risk of fines.

These producers who "plant in the dust" are a small minority, keen to plant in order to get their second-crop cotton in the ground in early January.

The government imposes a ban on planting soybean in Mato Grosso between July 15 and September 15 in an attempt to break the cycle of disease, with the No. 1 worry being Asian soybean rust.

However, those planting over the last couple of days argue that the plants will emerge from the ground on or after Sunday, and therefore are exempt.

Their bigger problem is that consistent rains are not forecast for the region until mid-October, as reported in Wednesday's blog, which puts their crop at risk.

Brazilian farmers will increase area this year despite a major jump in costs.

Overall soybean production costs rose 27% to R$2,433 per hectare ($428 per acre) in Mato Grosso, according to the Mato Grosso Farm Economy Institute (IMEA).

The increases have been across the cost range but a 54% jump in labor and agronomic support stands out. Seed costs rose 33%, chemicals increased 29% and fertilizers 25%.

However, as I talked about in recent blog posts, a recent run-up in soybean futures and a 21% devaluation of the Brazilian real against the dollar since March 1 have elevated margins and made farmers more enthusiastic about planting.



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