August 30, 2007

 

Brazil seen to profit more from soy than corn

 

 

Brazilian agriculture experts estimate that planting soy will bring farmers a higher profitability than corn for the upcoming 2007-08 crop.

 

While high soy prices at the Chicago Board of Trade (CBOT) increase profits for soy farmers, corn farmers suffer from rising costs for fertilizers.

 

"In most of Brazil's agriculture states, soy is now a better business than corn," said Stefano Passinato, an analyst at the Curitiba office of Agencia Rural consultancy.

 

"In Rio Grande do Sul state, we estimate 42 percent profitability for soy, while corn will be 25 percent. And in Goias state, corn farmers may face losses of 2 percent, while soy will bring profits of 26 percent," he added.

 

Soy prices at the CBOT for March and May 2008 delivery are negotiated around US$9 per bushel.

 

While soy prices increased around 25 percent since January this year, corn prices decreased 11 percent during the same period.

 

For Parana state, local Agroconsult consultancy estimates BRL457 (US$231.15) profitability per hectare for soy, and BRL236 (US$119.37) per hectare for corn.

 

Corn production costs suffer from the soaring prices for fertilizers, as the production devours high volume of nitrogen and potassium.

 

Agroconsult estimates that costs for fertilizers will increase by 23 percent for the 2007-08 corn crop.

 

Farmers will start planting the 2007-08 crop in October.

 

Brazil is expected to increase its soy-planted area by 5.4 percent to 21.9 million hectares for the 2007-08 crop, agribusiness consultancy Celeres estimates.

 

Brazil is the world's No. 2 soy producer and exporter behind the US.