October 9, 2007

 

Dry weather slows down Brazil's 2007/08 soy crop

 

 

The extended bout of dry weather seen in Brazil's soy-producing areas this year has farmers considering a slew of possible consequences to their 2007-08 soy crop, and their winter crops as well, agronomists said Monday (October 8).

 

Some analysts believe it is still too early to predict losses in terms of planted area or productivity, as soy can technically be planted well into October and as late as November.

 

"The only thing we can say for sure now, is that farmers' work is delayed," said Flavio Franca, an analyst at agribusiness consulting firm Safras & Mercado.

 

If weather continues dry the way it has been, however, most analysts concur that less-than-favourable outcomes are quite possible for the 2007-08 crop.

 

"This is definitely an atypical year. We have unfavourable climate conditions all over the country," said Leonardo Sologuren, an analyst at Minas Gerais-based Celeres consulting.

 

Less-than-average rainfall is expected at least through December, nationwide, said Franca, attributing the dryness to the La Nina phenomenon, characterized as unusually cold ocean temperatures off the Pacific Ocean at the equator.

 

Some areas in Brazil begin planting in the second half of September, such as No. 1 soy producing state of

Mato Grosso. This year a few farmers took a risk and put their seeds in the ground at mid-September when the first substantial rainfall hit, but Mato Grosso producers, along with some in western Parana, have already had to begin a replanting process. Parana is Brazil's No. 2 soy producing state.

 

A historical average of the last five years shows Brazil's soy crop should be at least 3 percent underway at this point, whereas this year, about 0.5 percent is planted so far, according to Franca.

 

Mato Grosso should have 6 percent of its field seeded, and Parana 4 percent by now; instead, they stand at 1 percent and 0 percent, respectively, according to Franca.

 

One main concern on soy producers' minds regarding the delay in planting is Asian soybean rust. Fields must be sprayed with fungicide for effective control, and the more planting is delayed, the further into the rainy portion of the crop season - December and January - the spraying is pushed. Rains after pulverization lower fungicide effectiveness, which is costly for farmers and has had some farmers leave rust-infested fields to rot when the fungus got out of control and costs for saving the plants were no longer beneficial.

 

Wet weather favours the growth and proliferation of Asian soybean rust.

 

A second, very real, possibility, is the lowered yields or altogether elimination of winter crops, namely corn and cotton, in some fields.

 

Some areas in Mato Grosso will likely see producers with cotton contracts exchanging their soy fields for cotton if the dry spell holds out for much longer. Cotton planting begins in late November.

 

The unpredictability of rainfall has been increasing over the last few years, but has producers especially concerned this year, said Stefano Passinato, a consultant at AgRural, an agribusiness consultancy. Isolated, sporadic rainfall makes it hard for farmers to plan their crops and forecast yields, he said.

 

Harvesting is also hampered with late planting. If farmers plant their soy too far into this month, they risk having a rainy harvesting period, so some may push their planting forward even more, into November, to be able to harvest in dry weather, according to Passinato.

 

The soybean plant must be entirely dry for the beans to be harvested, and if weather is too moist, beans left on the plants too long will rot.

 

Another option for producers who do not have a winter crop to concern themselves with, is to go with a late cycle variety of soy to avoid the rainy harvest issue. Late cycle varieties generally provide larger yields, but are not a feasible choice for farmers who are still intent on getting in their winter crop planting by late January or mid-February.

 

"All in all, producers are bordering on insecure, considering all these possibilities," said Passinato. "They are stomping their feet behind the starting line, anxious to get their soy in the ground."

 

Brazil is the No. 2 soy exporter behind the US.