Jul 27, 2023

Brazilian Farmers Worried About Low Corn Prices in Mato Grosso

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

Farmers in Mato Grosso, which is responsible for approximately half of Brazil's safrinha corn production, had harvested 84% of their 2022/23 safrinha corn as of late last week according to the Mato Grosso Institute of Agricultural Economics (Imea). This represented an advance of 15% for the week.

The statewide safrinha corn yield thus far is 115.1 sacks per hectare (109.8 bu/ac), which is an increase of 14.3% compared to last year. Mato Grosso is expected to produce a record safrinha corn crop of approximately 50 million tons.

Farmers are looking forward to their 2023/24 safrinha corn crop concerned about a higher cost of production. Imea is estimating that the cost of producing the 2023/24 safrinha corn crop in Mato Grosso is R$ 4,622 per hectare (approximately $390 per acre).

Given that cost of production, farmers would need to sell their 2023/24 corn for R$ 41.02 per sack (approximately $3.88 per bushel) to break even. The average corn price in Mato Grosso this past June was R$ 31.50 per sack (approximately $2.98 per bushel). If farmers in Mato Grosso did not forward contract any of their 2022/23 corn production, they could end up losing money.

Due to a lack of storage space, many farmers have been forced to sell their corn at harvest despite the low prices. A lot of the available storage is still full of soybeans from the 2022/23 harvest. Farmers are holding onto their soybeans longer than normal hoping for improved prices.