Jul 12, 2023

Brazilian Farmers in Mato Grosso May Lose Money on Their Corn

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

Farmers in Mato Grosso had sold approximately 53.7% of their anticipated safrinha corn production by the end of June compared to 63% last year. This represents an advance of 8.8% from the prior month. The average corn price in the state during June was R$ 36.05 per sack (approximately $3.40 per bushel), which was down 2.4% from a month earlier.

The safrinha corn in Mato Grosso was 49% harvested as of late last week compared to 74% last year and 59% average.

In the municipality of Ipiranga do Norte in north-central Mato Grosso, the safrinha corn is 80% harvested with yields in the range of 110 to 120 sacks per hectare (105 to 114 bu/ac), which is a good yield for the region. Unfortunately, corn prices are low, so a high yield is no guarantee of a profitable corn crop.

The president of the Rural Union of Ipiranga do Norte indicated that the cost of production in 2021/22 was R$ 2,119 per hectare (approximately $172 per acre) and corn sold for R$ 60 to R$ 70 per sack (approximately $5.45 to $6.36 per bushel). The cost of production in 2022/23 was R$ 2,900 per hectare (approximately $235 per acre) and the corn price is now R$ 30 per sack (approximately $2.80 per bushel).

Brazilian farmers who did not forward contract their corn or barter their future corn production for inputs, could lose money on their 2022/23 safrinha corn production.

For the 2023/24 corn crop in Mato Grosso, farmers have sold 4.6% compared to 10.7% last year. This represented an increase of less than 1% compared to the prior month. The average price was R$ 31.50 per sack (approximately $2.98 per bushel).