Jul 10, 2014

Sunflowers can offer Alternative to Safrinha Corn in Mato Grosso

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

As corn prices continue to decline, farmers in Mato Grosso are looking for alternative crops to grow for the second crop after their soybeans are harvested. Corn is by far still the most popular second crop, but low prices and high production costs have dampened the enthusiasm for safrinha corn. Corn prices in Mato Grosso are currently below the cost of production for a second year in a row and the prospects for improved prices any time soon do not appear to be very high.

In one area of the state farmers have found the alternative crop that they were looking for and its sunflowers. In the municipality of Campo Novo do Parecis, which is located in western Mato Grosso, farmers have planted 125,000 hectares of sunflowers in 2014, which makes it the largest sunflower producing municipality in Brazil. The 2014 acreage represents an increase of 148% compared to last growing season.

What jump started sunflower production in the region was the construction of a sunflower processing plant and now essentially 100% of the sunflowers grown in the region are processed into edible oil. There are now two processing plants in the vicinity and without those processing facilities, it would be uneconomical to grow sunflowers.

The first processing facility was constructed six years ago through the efforts of local producers. The Parecis S.A. processing plant has recently undergone a R$ 70 million expansion which increases its capacity from 90 tons per day to 600 tons per day. The new expanded unit will be operational in September.

With local processors, the economics of growing sunflowers is very similar to that of soybeans. Local sunflower prices are in the range of R$ 52 to R$ 55 per sack and sunflowers are approximately 30% cheaper to grow than soybeans. After soybeans, sunflowers are the second most important crop in the region.

Reduced logistical costs are the key to successful sunflower production in Mato Grosso. Eighty five percent of the value of sunflowers is found in the oil which represents 40% of the weight of the seed. Sunflower meal is used for animal rations, but it only represents 15% of the value even though it represents 60% of the weight of the seed. In other words, sunflowers must be processed close to where they are grown because transporting the sunflowers long distances is uneconomical.

While producers are generally pleased with their sunflower production, there is ample room for improvement. All the sunflower varieties are imported from Argentina and producers would like to see sunflower varieties developed specifically for their region. Farmers also lack specific chemicals designed to control local sunflower diseases.

Sunflowers will not replace safrinha corn in Mato Grosso any time soon, but for the small group of producers in Campo Novo do Parecis it is a viable alternative and a good lesson for producers in other regions of the state that they too could develop alternative crops to safrinha corn.