Aug 06, 2014

Pepro Corn Program in Brazil set to Start by mid-August

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

The Brazilian Minister of Agriculture Neri Geller, indicated on Monday that he feels the first auction for the 2014 Pepro Program will be held no later than August 15th. He indicated that it was urgent to start the process of commercializing the 2014 corn crop as soon as possible in order for farmers to plan for the 2014/15 growing season. He did not indicate how large the first auction would be or which states would participate. The Pepro Program is scheduled to be conducted in the states of Mato Grosso, Mato Grosso do Sul, and Goias.

The Pepro Program is put in place whenever the market price for corn falls below the guaranteed minimum set by the government, which in Mato Grosso is approximately US$ 2.80 a bushel. The government has allocated R$ 500 reals for the program, which they think will be enough to subsidize the price of 7-10 million tons of corn.

In 2013 the Pepro Program subsidized the price of 8.86 million tons of corn at a cost of R$ 449 million reals, but many of those payments have not yet been paid. By one account, 70% of the corn farmers who participated in the program in 2013 have not yet received their payment. Approximately 97% of the resources dedicated to the Pepro Program in 2013 were destined for producers in the state of Mato Grosso.