Sep 03, 2014

Brazilian Farmers Plant Early Maturing Soybeans to Reduce Costs

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

In two weeks farmers in central Brazil will be able to start planting their 2014/15 soybean crop and they are looking for ways to save money due to the lowest potential returns on their soybean production in five or six years. Reports from the Mato Grosso Soybean and Corn Producers Association (Aprosoja/MT) indicate that one way in which they can save money is to plant early maturing soybeans (95-100 day maturity) which are not exposed as long to soybean rust or various insect pests. Therefore, the use of early maturing soybeans can result in fewer fungicide and insecticide applications.

During the 2013/14 growing season insecticide applications on soybeans accounted for over 50% of all the agricultural chemicals used in Brazil, so anything that could be done to reduce insecticide applications would be a big cost savings for Brazilian soybean producers.

If farmers are lucky they might not have to apply their first fungicide application for rust control until the second half of December. For the last four years, there has been an average of only 20 confirmed cases of soybean rust registered in Brazil by the middle of December. By mid-December, the early maturing soybeans will only be about three weeks short of being mature, so getting an early start could definitely save money on rust control.

Early maturing soybeans are somewhat lower yielding than full season soybeans, but there is generally a premium in the market for early delivered soybeans which can compensate for the lower yields.

Production costs for the next growing season have increased and the Mato Grosso Institute of Agricultural Economics (Imea) estimates the average cost of producing soybeans in the state of Mato Grosso in 2014/15 will be R$ 2,400 per hectare or in the range of US$ 9.75 to 10.10 per bushel depending the yield and the exchange rate used to make the conversion between the U.S. dollar and the Brazilian real.

These costs are higher than last year, but it only illustrates the cost of producing one crop in one state. In the next article I have a more complete list of the cost of production across Brazil for last year's growing season. I hesitate to send out data that is a year old, but I have received numerous questions concerning the cost of production in Brazil, so I thought last year's data would at least give us some background information. In October Conab will publish a more complete list of the cost of production for the 2014/15 growing season.