Brazilian’s super harvest

The production of grains in Brazil was forecasted to increase by 19.5% in comparison to 2015/2016.  It represents a milestone in Brazilian agriculture. The super-harvest phenomenon of 2017 is a result of a combination of technology (crop protection products, seed technology and fertilizers) and favorable climate conditions. On top of that, the growing cultivated area estimated for one and half million hectares of increase just in the first semester, indicates that the agricultural expansion border has not reached its peak yet.

According to the National Supply Company (CONAB), Brazilian farmers found better rainfed cycles during the season, which was fundamental to achieve better yield indexes. In addition, the famous weather pattern “El Niño”, did not jeopardize the oilseed fields as it did in the previous season. 

Despite of the fact, that the price paid per bag of soybean decreased by 3%, the super-harvest was positive from the grower’s point of view. According to amis® soybean panel carried out by Kleffmann in 2016/2017, the farmers were paid an increment of US$ 37,6 per hectare in comparison with the last season [Fig. 1].

Source: Amis Soybean 2016/2017

Another crop that took advantage of the favorable climate conditions was the Summer Maize. CONAB estimated that the grown area of summer maize would increase by 29,3 million tons in comparison with the season 2015/2017. The growers of the cereals, who could sell it within the harvest period, earned 1.872 dollars per hectare, which is about 29% more in their revenue. 

On the other hand, the most famous winter crop of Brazil, Winter Maize, is facing the downside of the super-harvest, seeing the price paid per bag by 33% cheaper in comparison with the last season. Thus, it is expected that the investment with the technology package will be downgraded, in order to avoid major losses. That means that the growers will probably look after low-cost solutions such as generic crop protection products and cheaper maize hybrids. 

The super-harvest requires a higher management of the global stocks once it usually also drop all the commodities prices. As a solution to this problem, the growers should increase the investment with consultants and infrastructure. Usually the best prices are seen during early October, therefore building granaries or outsourcing them are the preferred scenario. That actions are a must if the growers want to reduce their loss due to the Brazilian poor logistic chain and take advantage of the best months to sell the grains.

Author:

Daniel Holzhausen, Amis® Product Manager, Kleffmann Group Brazil