March 17, 2006

 

Soy yields positive in Brazil's Minas Gerais

 

 

Soybean yields in Brazil's western Minas Gerais state should average 45-to-55 60-kg bags per hectare during the 2005/06 harvest, giving farmers at least a 5 percent profit margin as long as low prices and soy rust do not strip away production gains, farm consultancy AgroConsult said Thursday (March 16).

 

AgroConsult soy analysts, who are touring more than 900 kilometres of farmland in western Minas Gerais along the border with Goias state, said that every farm they have visited so far has had problems with Asian soybean rust. Some farmers were on their third fungicide application.

 

Production costs on the properties they have visited range between 800-1,000 Brazilian reals (US$380-US$475) per hectare. Minas Gerais soy farmers are receiving an average BRL21.00 per 60-kilogram bag of soybeans.

 

"If they can produce at least 45 bags (per hectare), and they will if soy rust does not get the best of them, then they will profit here in Minas Gerais," said AgroConsult soy crop analyst Guilherme Bastos.

 

Minas Gerais soy growers produced roughly 44 bags per hectare in the 2004/05 season, according to AgroConsult. Production losses in 2004/05 were due to dry weather.

 

Minas Gerais is the sixth largest soy-producing state in Brazil and is expected to harvest at least 2.7 million tonnes of soybeans in the 2005/06 crop. Its harvest is still another 30 days away, AgroConsult crop analysts said.

 

Nationwide, Brazil is expected to harvest roughly 58.1 million tonnes of soybeans, according to Agriculture Ministry estimates. The government is due to release a new official estimate on March 20.

 

Positive crop yields in Minas Gerais represent some of the only good news to come out of a local soy market reeling from a falling US dollar and rising local costs in reals, such as labour and transportation. The dollar is currently testing five-year lows against the Brazilian real and trading around 2.10 real.

 

The good news in Minas led one farmer, Joao Manoel Cruz, to say he would expand his soy and corn crop by 150 hectares next year. Minas farmers reduced their 2005/06 soy cropland by roughly 190,000 hectares to 1 million hectares.

 

Most analysts currently speculate that Brazil will reduce overall soy planted area in the 2006/07 soy crop, after reducing their 2005/06 soy area by over 1.5 million hectares to roughly 22 million hectares.