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Production
Estimates and Crop Assessment Division |
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Production
Estimates and Crop Assessment Division |
November 12, 2002
Brazilian farmers acted decisively last year, reducing acreage planted to corn in the main summer growing season by 1.3 million hectares or 12 percent in order to expand soybean cultivation. In 2002/03 they are poised to continue this trend by sowing significantly more soybeans at the expense of summer corn. This year’s summer corn acreage is forecast to fall 6 percent to a historically low level of 8.7 million hectares (the lowest level in the past 37 years). The main factor contributing to the significant decline in summer corn plantings in the past 2 years is the dramatically depreciating Brazilian currency, the Real. It has lost approximately 60 percent of its value versus the US dollar in the past 2 years, dramatically inflating cash returns for exported products like soybeans while providing little to no advantage to commodities sold into the domestic market such as corn. Farmers have responded by allocating greater land resources toward the crop with the strongest financial returns, greatest liquidity, and the least risk, namely soybeans. Should current forecasts prove accurate, summer corn area will have declined 1.8 million hectares or 18 percent since 2000/01 while soybean area increased 4.1 million hectares or 29 percent. USDA currently estimates Brazil’s 2002/03 total corn production at 35.0 million tons, down 2.0 million or 5 percent from last month and down 2 percent from last year’s crop. Harvested area is estimated at 11.8 million hectares, down 0.6 million from last month and down 2 percent from last year.
Brazil produces two seasonal corn crops, the first in the wet summer months (Oct-Feb) and the second in the relatively dry winter period (Feb-July). The summer crop is by far the largest, accounting for about 85 percent of total production. It is also the more productive, with yields outpacing those achieved during the winter season by a significant margin. A variety of economic factors are influencing farmers planting decisions in 2002/03, essentially pushing acreage in the two crops in different directions. The summer crop faces a great deal of competition for available land from other main season crops like soybeans, cotton, and black beans, whereas the winter crop is grown when a large portion of the countryside is fallowed and competition is minimal. As the 2002/03 season gets underway, anecdotal evidence in the form of national seed sales are indicating that a substantial reduction in corn plantings is imminent. According to the Brazilian Seed Producers Association (ABRASEM), corn seed sales in 2002 are down 37 percent from last year, after having already fallen 20 percent in 2001. This evidence of strongly declining demand for certified planting seed clearly suggests that corn sowing intentions are well down on last year. As it stands in November, 2002/03 summer corn area is forecast to decline significantly to 8.7 million hectares.
The winter corn crop, which normally represents about 15 percent of total production, is expected to increase 13 percent to 3.1 million hectares. USDA expects that lower overall summer corn production this year will exacerbate the existing domestic corn shortage, fueling further increases in already strong domestic corn prices. These conditions should provide ample incentive to growers in the winter season to expand acreage to a new record level. Overall, the forecast decline in summer acreage is expected to reduce corn production in most states during the main growing season, while the increased winter corn area coupled with higher yields should result in strongly higher output in the 2nd season.
The planting period for Brazil’s main summer corn crop normally runs from October through December, though much of it is in the ground by the end of November. The summer crop typically accounts for the lion’s share of national production, averaging approximately 80-85 percent of total output. The health and productivity of this year’s summer corn crop will be especially important to monitor in coming months, as Brazil faces acute domestic shortages of this primary feed grain owing to drought in 2001/02. As described earlier, despite the current shortfall in corn availability, growers are reducing sown area in favor of soybeans. Currently field reports indicate that near-normal planting progress has been achieved, though sowing was slowed during October owing to insufficient rainfall. According to MPrado independent crop analysts, corn planting had reached approximately 40 percent of the expected national acreage by November 1, which compares to a normal level of 45 percent. The summer rainy season was slightly delayed this year, but began in earnest in late October. Beneficial soaking rains reached virtually all of the primary corn growing regions by early November, and have spurred planting efforts across the country. It is expected that sowing progress reports in coming weeks will show marked improvement, as growers take advantage of the current moisture. USDA’s soil moisture model provides a synopsis of the regional moisture status and currently indicates excellent surface soil moisture conditions predominate in most of the corn growing areas of Brazil.
