Jul 20, 2021

Frost Damage Becoming More Evident on Safrinha Corn in Brazil

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

The 2020/21 Brazil corn estimate was left unchanged this week at 88.0 million tons, and I have neutral to lower bias going forward. The 2020/21 safrinha corn crop has faced unprecedented challenges, so I have a lower level of confidence in the Brazilian corn estimate. We will not know the final production until the last field is harvested and I suspect it will be lower than the current estimate.

Another mass of cold air is sweeping into southern Brazil early this week and it is expected to bring more frosts/freezing temperatures on Monday-Tuesday-Wednesday to some of the same areas that experienced three consecutive nights of frost three weeks ago. Temperatures as low as the low 20's °F are expected in southern Parana with frost as far north as southern Goias. The cold temperatures are expected to result in additional losses for the safrinha corn.

The safrinha corn in Brazil was 30% harvested as of late last week compared to 43% last year according to AgRural. This represents an advance of 10% for the week. The corn harvest is just getting started in Parana and Mato Grosso do Sul due to high grain moisture resulting from the late planting and recent frosts. Farmers are also concerned about poor grain quality due to the frosts that occurred during grain filling.

Probably the best safrinha corn in Brazil has already been harvested. The range in yields for the safrinha corn will be approximately 120 sacks per hectare (114 bu/ac) in parts of Mato Grosso to potentially 0 sacks per hectare in parts of Parana and Mato Grosso do Sul that were impacted the most from the frosts. As I mentioned in previous reports, the impact of the frosts on some of the late-planted safrinha corn would be the equivalent in the Corn Belt of three consecutive nights of frosts in mid-July.

Farm TV shows in Brazil over the weekend showed corn fields in northern Parana that were devasted by the frosts. In the hardest hit fields, the corn was very short and completely brown as if it was mature, but some of the kernels has not even made it to the dough stage. Corn yields could be down 70-80% with some farmers indicating that they would not even harvest their corn.

Mato Grosso Safrinha Corn - Farmers in Mato Grosso had harvested 51.9% of their safrinha corn as of late last week compared to 75.6% last year and 68% average according to the Mato Grosso Institute of Agricultural Economics (Imea). This represented an advance of 16% for the week. The fastest harvest pace is in northern Mato Grosso where 71% of the corn has been harvested. The slowest pace is in southeastern Mato Grosso where 27% of the corn has been harvested.

Yields in Mato Grosso are highly variable and might be in the range of 80 to 120 sacks per hectare (76 to 114 bu/ac), which is disappointing but probably still profitable given the strong domestic corn prices.

Municipality of Sorriso in Mato Grosso - In the municipality of Sorriso in central Mato Grosso, farmers are expecting safrinha corn yields in the range of 80 to 100 sacks per hectare (76 to 95 bu/ac) with some farmers reporting yield losses of up to 50% compared to last year according to the President of the Rural Union of Sorriso. For farmers whose yields are down 30% or more, they are going to have a hard time meeting their contracts to deliver corn.

According to the President of the Hog Producers Association of Mato Grosso (Acrismat), the spot price for corn in Sorriso is R$ 80.00 per sack (approximately $7.15 per bushel), which is a record high. Not only is the price of corn record high, but it is also hard to source corn as well because some farmers will not be able to meet their contracts. He feels hog producers will have to reduce their production and hope that fewer hogs will result in higher pork prices.

Parana Safrinha Corn - The situation for the safrinha corn in Parana continues to deteriorate. Earlier last week, the Department of Rural Economics (Deral) reported that the safrinha corn was rated 44% poor, 45% average, and 11% good. A week earlier, the crop was rated 42% poor, 46% average, and 12% good. The corn was 4% pollinating, 49% filling grain, 47% mature, and 3% harvested.

The municipalities with the highest percentage of the safrinha corn rated poor include Paranavai in northwestern Parana (85%), Cornelio Procopio in northern Parana (80%), Francisco Beltrao in southwestern Parana (75%), and Cascavel in western Parana (55%). In some of these areas the corn was planted 20-30 days later than normal and then encountered over 50 days without rain and frosts while the corn was still filling grain.

Late planting and dry weather had already taken a toll on the crop before three nights of freezing temperatures in late June and early July significantly impacted the crop. The second night of frost was especially harsh. Most frosts are expected in Parana early this week.

In the municipality of Maringa in northern Parana, farmers are expecting losses as high as 60-70% with maybe a complete loss for corn planted after the ideal planting window had closed. In the municipality of Londrina, which is also located in northern Parana, the situation is similar, and the municipality has declared a state of calamity.

Similar losses are expected in western and southwestern Parana as well. The quality of the grain is also expected to be poorer than average due to the drought and frosts.

Unfortunately, the amount of crops in Brazil covered by crop insurance is much lower than in the U.S. The Director of the National Program to Fortify Family Agriculture (Pronaf) estimates that less than 20% of the Brazilian soybean crop is covered by any form of crop insurance.

Mato Grosso do Sul Safrinha Corn - In the municipality of Aral Moreira on the border with Paraguay in southwestern Mato Grosso do Sul, safrinha corn yields could be cut in half due to the drought and frosts in late June and early July. In a good year, farmers in the area can expect corn yields as high as 120 sacks per hectare (114 bu/ac), but the yields this year will be more in the range of 60 sacks per hectare (57 bu/ac). The corn harvest should start in early August due to a 25-day delay in planting. It is anticipated that some farmers will not be able to meet their contracts to deliver corn.

Sao Paulo Safrinha Corn - The safrinha corn harvest in Sao Paulo has not started, but farmers are expecting losses in the range of 50% due to drought and frost according to the president of Aprosoja-SP. The extended drought reduced the yields 30-40% and then the frosts increased the losses to as high as 50%. Normally, safrinha corn yields in the state are in the range of 100 sacks per hectare (95.4 bu/ac), but this year they may be 30-50 sacks per hectare (29-48 bu/ac) with some farmers abandoning the crop or cutting it for silage. The total extent of the losses will not be known until all the corn is harvested and it could be worse than currently anticipated.