Brazil's corn crop forecast of 57.5 million tonnes for 2007/08

Even with the ongoing high international corn prices, area is expected to increase minimally in the coming year, with any forms of expansion occurring in the safrinha (second) crop.

In the last year, Brazil seems to have found its current equipoise for area planted with particular crops and no strong shifts between crops are expected. Even though international prices have escalated significantly, so has the cost of production.

The average cost of transportation has increased 50 percent in the last year and according to some accounts, the cost of production has nearly doubled with the majority of this escalation due to rising price of fertlisers.

In addition, strong environmental restrictions and the need for consistent environmental regulations and strong property rights further hinder such expansion.

Brazil has lowered its 2007/08 marketing year (March 2008 / February 2009) export forecast to 9 million tonnes, predominantly due to the current strong domestic demand which is diverting corn from export channels and resulting in defaults in some contracts.

For the full USDA report, please click here