A Corn Crop Is Not Profitable
Brazilian producers have already planted 92% of the estimated area for soybeans in the 2017/2018 harvest, according to AgRural survey.
The number surpasses 90% of last year and 87% of the average of five years.
Input sales are a good thermometer to evaluate crop performance. When the outlook is good, the producer opens the wallet and invests more in technology. According to input retailers, the 2017/2018 soybean crop is doing well.
According to Marcos Antonio Camargo, CEO of the Agromave, though farmers have already made the advance purchase of inputs for the first 2017/2018 crop, he sees a greater movement in business this season. “For the soybean crop, we already sell 100% of the inputs, but we are having an increment of investments,” says Camargo.
Agromave has eight stores for resale of inputs (seeds, pesticides, and fertilizers) located in the Mid-North region of Mato Grosso, the largest soybean producing state. “The producer has invested more in soil correction in this harvest and is taking very good care of the nutritional aspect in soybean fields,” says Camargo.
With this scenario, Camargo estimates a 20% increase in Agromave’s total revenues from the sale of inputs in 2017. “The producer continues to invest in traditional pesticides, but is now investing more in multisite fungicides, called protective fungicides. This type of product promotes the rotation of molecules,” he says.
According to Camargo, in the Mid-North region of Mato Grosso more than 4 million hectares are cultivated with soybeans. He says that as the soybean crop is developing well in this region, there is currently a strong demand for products to protect the crop. “The producer is investing more and respecting the cost-benefit question. He’s using a mix of patented and generic products.”
He also said that the delay of 10 days at planting has already been minimized in the region. “The impact of sowing delay has been minimized by early soybean varieties,” says Camargo. “In our region the planting was already finished in November, the rains have normalized, and the crops are developing well.”High Demand For Beniseed As Benue Farmers Begin Harvest
In the state of Mato Grosso do Sul, the soybean crop is also developing well, according to Jonis Assmann, a partner-owner of the resale company Pantanal Agrícola. “Here the crop is developing within normality, but the producer is complaining that profitability is small,” he says.
Pantanal Agrícola has eight stores in the states Mato Grosso, Goiás, and Mato Grosso do Sul. “For soybeans, the producer made a good investment seeking maximum productivity and they are still making occasional purchases of foliar fertilizer, insecticide, and fungicide,” he says. “But if it keeps raining a lot here in the region, we can have a higher incidence of Asian rust, and the producer will spend more on fungicide.”
In addition to reselling inputs, Jonis Assmann is a grain producer and is growing 15,000 hectares (37,065 acres) of soybeans this season. According to him, the cost of soy production in Mato Grosso do Sul is approaching R$ 3 thousand (reais) per hectare and producers are worried about the finances. “We need to have productivity above 60 bags (60-kilo bag) per hectare to have a satisfactory financial return.”
At this moment, what is selling at the retail store is the second-crop 2017/2018, and the input news isn’t good. “The producer is now buying inputs for the second crop. He is buying fewer inputs for corn; we estimate a reduction of about 10%,” says Marcos Camargo.
The uncertainty also occurs because, with the delay in the cultivation of the first soybean crop, the second corn crop may be delayed. “We have low prices for corn, and the climate risk is very high. We need to analyze the evolution of the corn market. At best, the ideal is to plant corn until February 28 to have a good window of cultivation,” says Jonis Assmann.
According to Assmann, with the low prices offered for Brazilian corn, the producer is not willing to invest. “Farmers are complaining a lot about the price of corn seed and are looking for cheaper seeds. The producers will invest in material with less technology,” says Assmann.
Camargo already foresees the impacts of the smaller investment in the production. “I have clients who will reduce the area planted by 10%, apply less fertilizer, and invest in seed with less technology. We estimate a 20% drop in corn production here in the region because of reduced area and reduced productivity.”