Brazil soy farmers to see lower output costs in 2009-10

Brazilian agriculture consultancy Celeres said the average cost of production for Brazilian soy farmers should drop in the 2009-10 crop season, primarily due to lower fertiliser costs.

"The cost of soy production should fall around 10 percent in 2009-10," Leonardo Menezes, an analyst at agricultural consultancy Celeres, told Dow Jones Newswires on Tuesday (August 18).

This is opposite last year when fertiliser prices skyrocketed and Brazilian soy farmers were forced to cut back on use of inputs, Menezes said.

Lower fertiliser costs in key soy-growing areas such as Mato Grosso state, Brazil's No. 1 soy producer, will help drive down costs. For instance, Rondonopolis has seen fertiliser prices drop to BRL850 (US$457) per tonne in July this year compared to BRL1,250 per tonne a year ago.

As a result, fertiliser costs should account for 38 percent of farmers' direct costs in 2009-10 versus 49 percent in 2008-09, said Celeres.

Menezes said the average cost of production was BRL53 per 60-kilogram bag of soy in Mato Grosso.

Brazil is the world's No. 2 producer of soy after the US.

US$1 = BRL1.84 (August 19)