South American Update Archive

News and notes from South America

Changing weather patterns

Farmers in the South American country of Argentina have struggled through severe drought in recent years thanks to multiple years of La Niña. Mark Brusberg, USDA chief meteorologist, recently spoke at the United States Department of Agriculture’s Ag Outlook Forum. He said the pattern may finally be changing for Argentina.

“The good news for some of these producers is we are now forecast to go into an El Niño. What does that mean? They look forward to this circulation pattern,” Brusberg said. “Now this is completely the opposite of what you would expect to normally happen. You’ve got reverse flow all over the place, but interestingly enough, the impacts really are the opposite of what you get during a La Niña. And in the case of Argentina, you would expect wetter than normal conditions.”

Brusberg said this is reason for some optimism ahead in Argentina for improving yields. 

“What we’ve seen in past years in Argentina is that the years after La Niñas they tend to rebound.… Continue reading

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Agave program to enhance sustainability of energy markets

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

Brazil is frequently in the media spotlight to illustrate arguments on environmental issues and policies. The news often comes across as a set of bitter comments on weak institutions or the country’s inability to monitor and safeguard its forests. I put this conversation aside and invite the interested reader to focus on a positive analysis regarding energy supply and sustainable alternatives.

Applied economists, myself included, have published articles describing the history that led Brazil to hold one of the most sustainable energy mixes in the world. Despite challenges in revamping outdated macroeconomic policies and reducing the involvement of the central government in market matters in the past, citizens of the country today consume electricity that is 92% renewable. Hydroelectric plants have led the generation capacity charts since the 1980s, while more recently, windmills and biomass-based plants have increased their participation.… Continue reading

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Bumper soybean crop starts pressuring prices in Brazil

By Daniele Siqueira, AgRural Commodities Agrícolas

January has come to an end with Brazil’s 2022/23 soybean harvest behind schedule. According to AgRural, 5.2% of the area had been harvested by Jan. 26, compared with 10.4% a year ago and 6.6% in the five-year average. That means that approximately 8 million metric tons had left the fields by the date, below the 14 million metric tons harvested in the same period last year, when production was smaller due to drought, but the harvest was progressing more quickly.

The delay is caused by constant rains in top producer Mato Grosso and slower-than-normal crop development due to overcast skies in late 2022 in other states, especially in Paraná, Brazil’s number two producer. Although Brazilian farmers can catch up as soon as the weather conditions allow them to do so, the harvest delay impacted the export pace in January and will probably cause logistical bottlenecks in February and March.… Continue reading

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Argentina’s soybean dollar program and impact on global supply

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

The macroeconomic policy in Argentina and their government’s strategy to improve the central bank’s financial reserves have crossed paths with agribusinesses and the production of commodities. The country has been grappling with high inflation rates and a weakening exchange rate of the Peso against the United States Dollar for several years, but the situation has worsened more recently.

Most countries around the globe were affected by inflation following the pandemic years as a collateral effect of social stimulus plans and disrupted supply chains. Currencies of developing countries devalued consistently against the Dollar and investors left to seek stable markets. Yet, Argentina’s economy has taken a darker turn than most. Its currency continues to depreciate at unprecedented rates. On Jan. 10, 2023, one U.S. Dollar was equal to 180 Pesos, compared to 60 Pesos per Dollar in January 2020 — a threefold depreciation in three years.… Continue reading

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When will Brazilian farmers sell their bumper soybean crop?

By Daniele Siqueira, AgRural Commodities Agrícolas

I am writing this article in late December, a time of the year when Brazil is starting to harvest the very first soybean fields of the season — although more significant progress is expected to be seen only in mid-January, as it normally happens. Despite some losses caused by spotty rains in western Paraná, where harvest starts in January, and concerns about below-normal rains in Rio Grande do Sul, where most of the crop is still in vegetative and early reproductive stages, the expectation is for a bumper 2022-23 production.

BRAZIL – ACCUMULATED PRECIPITATION IN DEC 2022

INMET Millimeters.

If weather conditions improve in dry areas in the south of the country and remain favorable in other states, production will easily surpass the 150 million metric tons mark — 25 million up from last year. Less than one-quarter of the potential production, however, has been sold by producers so far, in the slowest farmer-selling progress since 2008/09, according to AgRural.… Continue reading

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Takeaways from the COP27 and implications to South American grain and cattle sectors

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

Between Nov. 6 and Nov. 20, world leaders gathered in Egypt for the 27th United Nations Climate Change Conference (COP27). Despite criticisms that became viral via social media regarding the large amounts of greenhouse gases (GHG) emitted by thousands of private jets flying to the conference, world leaders discussed and deliberated about environmental policies to manage global warming.

Inconsistencies aside, the COP27 showed a continuing and strengthening collaboration between public and private parties in a pragmatic route to accomplish the resolutions of the Paris agreement. The Paris Agreement is an international treaty signed in 2016 by 194 world leaders in which countries take on the responsibility to cap global warming at 1.5degrees C above pre-industrial average temperatures. Despite a large number of signatories, the Paris Agreement is not free of criticism, leading to the United States’ withdrawal in 2020.… Continue reading

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Tips to understand Brazil’s soybean production

By Daniele Siqueira, AgRural Commodities Agrícolas 

The record area of 43.2 million hectares that Brazil is likely to cultivate with soybeans in the 2022-23 crop was 91% planted by Dec. 1, compared with 94% in the same period last year and in line with the 5-year average, according to AgRural data. Production, based for now on trendline yields, is seen at 150.5 million metric tons, 25 million up from last season, when a severe drought linked to the phenomenon La Niña resulted in historical losses in southern states.

AgRural will replace trendlines by actual yield estimates by state later this month. So far, the new crop develops well, but rains have been spotty in some regions, and farmers in central states, including top producer Mato Grosso, are concerned about dry spots that are now heading into the pod-filling stage. Hit-and-miss rains have also been seen in southern states, but the situation is far from being as bad as the one faced a year ago.… Continue reading

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Skyrocketing input prices amid challenging weather conditions in South America

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

The beginning of autumn marks the time of the year to turn our attention south and check the initial development of the growing season in Brazil and Argentina. At this time, South American growers are busy sowing their crops before spring takes place and brings rainfalls back. But before sowing, southern growers must have put a good effort into strategizing and circumventing challenges, especially in times of uncertainty. Their decisions and thought process may spark insights about North America’s upcoming ag input market landscape in five to six months.

The appropriate timing for planting has certainly been part of the thought process for Brazilian growers. The most logical driving factor in guiding growers’ decisions over planting date this season has been the high probability of La Niña. The National Oceanic and Atmospheric Administration (NOAA) agency projects a 79% probability of La Niña in the last quarter of 2022, with the probability dropping to 47% in January 2023.… Continue reading

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What a year! (And it’s still March)

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.

Daniele Siqueira

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

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How two ag practices transformed the Brazilian Cerrado

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. 

Guil Signorini

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

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Yes, Brazil’s soybean crop has failed: What now?

Daniele Siqueira

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

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When energy policy and sustainability clash

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

Guil Signorini

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

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Brazilian soybeans: not a disaster yet, but a serious failure is not impossible

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. 

Daniele Siqueira

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

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Factors behind production gains in Brazil

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.

Guil Signorini

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

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Soybeans are still the star, and that’s why the second corn crop continues to be Brazil’s “little crop”

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.  

Daniele Siqueira

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

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Driving forces and challenges as the growing season takes off in the Southern Hemisphere

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.

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

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

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Women in agribusiness — Making a difference inside and outside the gate

By Roberta Paffaro

Driving a tractor on a farm, leading employees across different functions, directing and being responsible for sales and risk management. When you imagine it, I bet you may be thinking that men do these kinds of jobs. While men are still the majority for leaders in agriculture in Brazil, research developed by Brazilian Institute of Geography and Statistics (IBGE/2017) has proven that women are conquering their space. For every 10 farmers, two are female. In Brazil, young female farmers are building a more successful agribusiness, including technology and innovation in the field. 

Roberta Paffaro

But it is not that easy. I have been working in agribusiness for more than 12 years and travelling to main producing areas in Brazil, Argentina, Uruguay and Paraguay. I started realizing an increase of women participation in my lectures about risk management. One day, I met a farmer and she shared her life story with me.… Continue reading

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Time to talk about Brazilian corn

By Daniele Siqueira

I’m here again to bring you a new update on Brazilian soybean and corn crops. In a normal year, about 20% of Brazil’s soybean area would be harvested by now. This year, less than half of that is harvested so far, because the crop was planted later than normal (it was too dry in September and October) and also because overcast skies and constant rains in the second half of January slowed down the crop development.

Daniele Siqueira

The delayed crop, combined with virtually non-existent beginning stocks, has had an impact on Brazilian supply and exports, as I warned here months ago. In January, Brazil exported only 49.5 thousand metric tons of soybeans — the weakest result for the month in seven years. In January 2020, shipments reached 1.4 million metric tons.

In February, the vessel lineup shows that 9 million metric tons of soybeans could be shipped by the end of the month.… Continue reading

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Brazilian agribusiness: A rising king?

By Roberta Paffaro

Brazilian agribusiness has been highlighted over last decade for a couple of reasons. It became a major producer and exporter of soybeans in the world. In the 2020/21 crop, despite all the weather issues and late planting, Brazil expects to harvest 129.7 million tons, a 6.8% increase compared to 2020. Brazilian soybeans are the “little darling” of China — the main destination for exports. Brazil already sold almost 90% of all soybean production due to strong prices sustained by the devaluation of the Real in 2020.

Roberta Paffaro

What about corn? Brazil has two crops in the year. The first one is between October to December and the second, which is called “safrinha,” is from January to April. The total corn crop production is expected by analysts to be 103.2 million metric tons (mt). 

Brazil became a very important worldwide corn supplier in the last decade. According to CONAB (National Supply Company), Brazil produced 50 million mt in the 2008/2009 crop.… Continue reading

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Good crop, strong exports and the Amazon

By Daniele Siqueira

The last time I wrote here, in mid-December, there were all sorts of rumors around the 2020-21 Brazilian soybean crop, because it was planted about 30 days later than normal due to irregular rains in September, October and November.

The Brazilian delay was one of the main bullish fundamentals at that time in Chicago. Not that the crop was necessarily headed for a disaster (soybeans don’t fail during the vegetative stage!), but because the delay, combined to virtually zero beginning stocks, would leave Brazil out of the export game in January.

That would make room for more U.S. sales, especially to China — something that is really happening now and helping boost international prices even further, along with a very tight supply and demand balance in the U.S., speculations around the crop development in Argentina (it’s doing fine so far, by the way) and tensions between that country’s government and farmers.… Continue reading

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