May 16, 2019

Brazil Making Slow Progress on Increasing Grain Storage Capacity

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

Brazil has always had a chronic problem of not having enough storage capacity for their ever-increasing grain production, but they are making some progress especially in the state of Mato Grosso. Farmers in Mato Grosso now have the capacity to store on-farm 8 million tons of grain which represents 22% of their annual grain production.

This is higher than the national average according to Conab which conducted the survey. It is no surprise that Mato Grosso leads other regions of Brazil in on-farm storage because it has the highest percentage of large scale farmers. Many of these farms are also located long distances from commercial grain elevators, so on-farm storage allows them to harvest at a faster pace instead of having to wait for trucks to haul the grain to the commercial elevators. It also cheaper and it gives them more options for marketing their crops.

According to the Conab survey, there are 2,192 storage facilities registered in the state of Mato Grosso with a capacity of 37.5 million tons. Even with the recent increases in storage capacity, Mato Grosso is still 40.8 million tons of storage capacity short of what is recommended by the Food and Agriculture Organization of the United Nations (FAO). They recommend that the storage capacity should be 20% more than the annual grain production. Conab is currently estimating that the 2018/19 grain harvest in Mato Grosso will total 65.4 million tons.

The FAO recommendation may not be entirely appropriate for the situation in Mato Grosso where there are two distinct grain harvesting periods. The soybeans in the state are harvested generally from January through February, whereas the corn is harvested generally from June through July. This staggered harvest allows producers and grain companies time to empty their grain storage facilities before the next crop is harvested. Even with the offset in harvests, a lot of corn in Mato Grosso is stored in outside piles during the dry season.