February 25, 2008

Brazil's farmers to plant more soy to cash in on high prices

Brazilian farmers will plant between 5 percent and 10 percent more land with soy this year to take advantage of high prices and strong international demand from countries like China, Brazilian government officials said Friday.

Edilson Guimaraes, an under secretary at the Brazilian Ministry of Agriculture, said he believes there will be a 5 percent increase in soy planting when Brazilian farmers plant the 2008-09 crop in October. Brazil planted about 21 million hectares of soy in 2007.

Savio Pereira, general coordinator for oilseeds at the Brazilian Ministry of Agriculture was even more optimistic, saying he expected a 10 percent increase in planting.

Guimares and Pereira spoke to Dow Jones Newswires at the US Department of Agriculture's annual Agricultural Outlook Forum.

Many farmers in Brazil are suffering from a lack of investment capital to expand their operations, Pereira said, but prices are so good that there will be an expansion. Guimaraes agreed.

Guimares said, as a logistical issue, expanding soy acreage is not difficult. He said there is plenty of pasture land that can be converted easily and he also suggested that high fertilizer prices would spur some farmers to switch from corn to soy.

The USDA is predicting Brazil will produce 60.5 million tonnes of soy for the 2007-08 marketing year, up from 59 million tonnes for 2006-07.