2022 South American Update

By Daniele Siqueira, AgRural Commodities Agrícolas

March has arrived and that means that another Brazilian soybean crop is wrapping up and the new U.S. crop is just around the corner. It has been quite a season, with hot, dry conditions decimating a significant part of the production in southern Brazil.

With about 50% of the 2021/22 harvest complete by the end of February, production is estimated at around 125 million metric tons, 20 million down from the initial estimates thanks to a harsh drought sponsored by La Niña, the devilish girl.

Selling at record prices (but just a little)
The crop failure in southern Brazil, along with a disaster in Paraguay (production is more than 50% smaller than it would be in a normal year) and some losses in Argentina, where the soybean fields still need rain in March to avoid major yield losses, has helped support higher prices in Chicago since the beginning of the year.… Continue reading

By Guil Signorini, Department of Horticulture and Crop Science, The Ohio State University

A fascinating trait of modern human society is its resilience and ability to adapt to challenges. Two recent South American updates touched on this topic when talking about the latest occurrences in the Brazilian agricultural sector. The first update mentioned innovative financial tools to ease the steep operational costs of growing grain crops in Brazil. A second update defined the 1995 energy sector reform as an essential policy change to incentivize renewable electricity generation. 

In this vein, grain crops grown in Brazil offer additional insights. Natural challenges caused by the tropical weather and poor soils were the engine and fuel behind remarkable maneuvers to address production limitations. Back in the 70s, when the expansion of agriculture reached the Cerrado region of Brazil, the soils could be described as follows: sandy or light-textured, naturally poor in nutrients, highly acid (pH between 3.8 and 5.2), little organic matter (between 3% and 5%), high Aluminum saturation (greater than 45%), and little water holding capacity (less than 3 inches in soils with 23-inch effective depth).… Continue reading

By Daniele Siqueira, AgRural Commodities Agrícolas 

Imagine having your soybean crop trying to bloom and fill pods under 100 to 110 degrees every day for two weeks, after receiving below-normal rains for nearly three months and already having lost most of your corn crop, which is planted earlier than soybeans. That has been the reality in Rio Grande do Sul, Brazil’s southernmost state and number-three soybean producer. 

In the first days of January, AgRural cut its production estimate for the 2021-22 Brazilian soybean crop to 133.4 million metric tons, 12 million down from the potential production forecasted in early November and about 4 million metric tons smaller than the record crop harvested in 2020-21. Even before the failure in Rio Grande do Sul, Paraná (our number-two soybean producing state) also lost a significant part of its crop due to hot dry conditions in November and December, and further damage occurred in January. … Continue reading

By Guil Signorini, Department of Horticulture and Crop Science, The Ohio State University

Brazil offers one of the most exciting cases of success when it comes to clean energy. Due to a favorable landscape, an abundance of rivers, and natural dams, approximately 65% of the electricity consumed in the country comes from large-scale hydropower plants. But it was through innovative policy reform in 1995 that renewable energy producers were authorized to trade electricity directly with final consumers. Fast forward, estimations suggest that 9.5% of the electricity consumed today comes from biomass, the second most important source in Brazil’s electricity matrix. Biomass-based electric generated by agricultural products is used for lighting approximately one-tenth of the country’s houses, farms, and businesses.

The Brazilian fuel sector is just as clean. Nearly all fuel stations sell ethanol, gasoline, and diesel. Most passenger cars and motorcycles are equipped with flex-fuel engines that can take gasoline, ethanol, or any blend between the two fuels.… Continue reading

By Daniele Siqueira, AgRural Commodities Agrícolas 

I am writing between Christmas and New Year’s Day — that holiday week when we are not exactly sure about which day is which. Here in Brazil, many people take a break during this period of the year, and that is also my case. And, being in the Southern hemisphere, this is, of course, our summer break. 

This spring/summer has been particularly hot and dry in southern Brazil, a region made up of three states (Rio Grande do Sul, Santa Catarina and Paraná) that account for about 30% of the country’s soybean production. After good rains in October, the region started to experience a spell of dryness and above-than-normal temperatures that have weighed on the 2021/22 soybean crop prospects since then.

Things started to become serious in November

The first regions to feel the pain imposed by the effects of another La Niña (a phenomenon that sometimes reinforces drier periods that normally hit the southern states during this time of the year) were western and southwestern Paraná, where soybeans are planted between mid-September and mid-October.… Continue reading

By Guil Signorini, Department of Horticulture and Crop Science, The Ohio State University

Last month this column featured an article about souring fertilizer and chemical costs faced by Brazilian farmers as the 2020/2021 season unfolds. The latest developments show that the Southern farmers have not changed planting and growing plans due to these challenges. On the contrary, projections from CONAB (Federal Agency of Agricultural Supply) indicate that grain growers intensified production. Soybean production is expected to reach 4.9 billion bushels, a 7% increase over the last season, and the highest production mark ever registered. Projections for the corn crop are just as significant. Estimations indicate that the country will produce 4.6 billion bushels, a vital recovery from last season’s drop in production due to drought.

Nevertheless, what catches our curiosity is how Brazilian farmers have managed to improve production projections considering the pandemic and the severe pressure from high ag input costs.… Continue reading

By Daniele Siqueira, AgRural Commodities Agrícolas 

Christmas lights are everywhere once again and that is a reminder for Brazilian farmers: it is December already and time to make or break the soybean crop. I am writing this article early in the month, while the crop in central states (such as top producer Mato Grosso) develops in very good shape, already heading into the pod-filling stage with abundant rain and excellent yield prospects.  

Things have been good too in the Southeast and in the North/Northeast of the country, where most of the soybeans are still in vegetative stages. In the South, on the other hand, a drier and warmer pattern has slowed the soybean planting in Rio Grande do Sul, our third largest producer, and made farmers concerned about areas in reproductive stages in parts of Paraná, Brazil’s second-largest producer, especially because forecasts for the first half of December show little rain and high temperatures. … Continue reading

By Guil Signorini, assistant professor, Department of Horticulture and Crop Science, The Ohio State University

It is that time of the year again when our fellow farmers from Brazil dedicate time and energy to plant their crops. And as they do, challenges and opportunities in their operations signal factors and trends that may drive our decisions next Spring when the weather permits us to plant our crops again.

Brazilian farmers are fast-paced sowing soybeans due to favorable weather and soil conditions. On Nov. 1, IMEA (Mato Grosso Ag Economics Institute) informed that 83% of the soybean crop has been sowed in the state. The state of Mato Grosso alone grows more soybeans than Ohio, Michigan, Indiana, and Illinois combined. It also grows approximately 60% of the corn area in these four Midwestern states. Although other states of Brazil lag behind in sowing, research agencies estimate that 55% of the total soybean area has been sowed in the country, the highest mark in the last 5 years.… Continue reading