Jan 26, 2022

Cooperative in Rio Grande do Sul Estimates Soybean Loss at 48%

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

Crops in Brazil's southernmost state of Rio Grande do Sul continue to be impacted by extremely hot and dry conditions. After weeks of dry weather and historically high temperatures, irreversible damage has been done to the soybean crop in Rio Grande do Sul according to Federation of Agricultural Cooperatives (FecoAgro/RS) and the Cooperative Technical Network (RTC). The RTC represents 23 cooperatives in the state that account for more than 50% of the soybean acreage in the state.

RTC conducted a survey of the member cooperatives and as of January 22nd, they estimated that the soybean losses in the state would be 48.7%, which is double their estimated losses on January 4th, which was 24%. RTC estimated that the average soybean yield in the state will be 31 sacks per hectare (27.7 bu/ac) compared to their initial yield estimate of 60.2 sacks per hectare (53.8 bu/ac).

In addition to lower yields, the final soybean acreage may end up below what Conab is estimating for the state, which is 6.27 million hectares (15.4 million acres). The potential lower acreage is the result of hot and dry conditions which impeded planting and emergence of the soybeans. The RTC survey indicated that 3.5% of the intended soybeans had not been planted and that 6.5% of the planted soybeans had not emerged.

Considering Conab's 2021/22 acreage estimate, approximately 220,000 hectares of soybeans in the state had not been planted and 410,000 hectares had not yet emerged. Taken collectively, RTC estimates that the soybean production in the state could be down as much as 10 million tons from initial expectations.

In the municipality of Ijui in northern Rio Grande do Sul, farmers are facing a very difficult situation with their 2021/22 corn and soybean crops. Extreme temperatures and a historic drought have some producers facing crop losses bordering on 100%.

According to the president of the Rural Union of Ijui/RS, the region is suffering the second worst drought in history, surpassed only by the drought of 1945. For weeks, temperatures have been extremely high in the range of 40°C (104°F) or higher and rainfall has been minimal. The rain that does fall quickly evaporates under the extreme temperatures. A cold front is forecasted to move into the state this week bringing with it a chance of rain and cooler temperatures, but irreversible damage has already been done to the soybean crop.

The president of the Rural Union is recommending that producers become proactive and contact the grain companies where they forward contracted some of their anticipated production to start the renegotiation process because they may not be able to meet their delivery commitments. He is also recommending that they also contact their banks and input suppliers to start negotiating extended repayment terms because their grain production will probably not generate enough revenue to pay back their loans.