Apr 27, 2023

Deficit of Grain Storage in Mato Grosso Could Reach 64 Million Tons

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

The lack of grain storage space is a chronic problem in Brazil especially in the state of Mato Grosso, which is Brazil's largest grain producing state. According to Conab, the total grain storage space in Mato Grosso in 2022/23 is 44.7 million tons, which is up 8.8% compared to the 2021/22 season.

The production of soybeans and corn in the state in 2022/23 is estimated at 90.7 million tons, which is up 7.1%. When the current production is combined with the old crop carryover, there is a deficit of 64 million tons of storage space according to the Mato Grosso Institute of Agricultural Economics (Imea). The two crops in the state are harvested at different times, which helps spread out the need to store grain. The soybeans are harvested primarily in January and February, while the corn is harvested in June and July.

To complicate the problem even more, farmers in the state have been slow sellers of their recently harvested soybean crop, which is running 8% behind last year at this time. Forward contracting of their anticipated safrinha corn is running 20% behind last year. A recent slump in grain prices have made farmers much more cautious about selling their grain.

The safrinha corn harvest in Mato Grosso will start in early June and there is currently not enough storage space for the anticipated production. If farmers have not purchased silo bags for the corn, they will be forced to sell their corn at harvest regardless of price.