Nov 16, 2020

Brazilian Cotton Acreage to Decline in Favor of More Corn and Soy

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

Farmers in Brazil are very pleased with record high prices for their grain and as a result, they are increasing their grain acreage in 2020/21. That is not the case though with cotton producers who are disappointed with mediocre cotton prices. Therefore, it is anticipated that Brazilian cotton farmers will reduce their 2020/21 cotton acreage in favor of more soybeans or safrinha corn production.

In their November Crop Report, Conab estimated that the cotton acreage in Brazil would decline by 96,000 hectares or about 5.7% from 1.665 million hectares in 2019/20 to 1.567 million in 2020/21. The two main cotton producing states in Brazil are Mato Grosso with 73% of the anticipated cotton acreage in 2020/21 and Bahia with 16% of the cotton acreage.

The vast majority of cotton in Mato Grosso is produced as a second crop after soybeans, so the safrinha cotton competes with safrinha corn for acreage. Cotton needs a longer growing season than corn, so farmers need to plant cotton as soon as possible after the soybeans are harvested. The ideal planting window for safrinha cotton in Mato Grosso closes about the end of January.

Unfortunately, the soybean planting was delayed in Mato Grosso this year due to dry conditions, so a significant portion of the safrinha cotton will have to be planted after the ideal planting window closes.

Conab is estimating that the safrinha cotton acreage in Mato Grosso will decline by 17,000 hectares or 1.5% from 1.166 million hectares in 2019/20 to 1.149 million in 2020/21. It is possible that the safrinha cotton acreage may decline even more than that due to the mediocre cotton price and record high corn prices.

In the state of Bahia, the cotton is planted as a full-season crop starting in December, so cotton competes with soybeans and corn for acreage. Conab is estimating that the cotton acreage in Bahia will decline by 62,400 hectares or 19.8% from 313,700 hectares in 2019/20 to 251,000 hectares in 2020/21.