May 20, 2024

Rio Grande do Sul Faces Multiple Losses and Future Challenges

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

The governor of the state of Rio Grande do Sul in southern Brazil estimated last Friday that losses due to the flooding could surpass R$ 19 billion, but that was just a preliminary estimate and the final cost could be much higher once all the damage has been assessed.

As of last Friday, there were 154 confirmed deaths with 98 still missing and 806 injured. More than 2,200,000 people were impacted by the flood in 461 of the state's 497 municipalities.

For some farmers, this was the second flood in six months and they will probably not be able to recover. They lost their crops, machinery, buildings, storage units, residence, livestock, inputs, etc. Many of the fields suffered severe erosion or are covered in deep mud.

Certainly, this will impact winter wheat planting, which should be ongoing at this point as well as the 2024/25 corn crop that would normally be planted starting in August and the next soybean crop starting in September and October.

Even if farmers are able to plant their 2024/25 crops, their financial situation will be precarious and they will probably reduce their inputs to save costs.

Additionally, there may be a La Nina in place for the 2024/25 growing season that usually results in dryer than normal weather in southern Brazil. The last La Nina resulted in severe drought in Rio Grande do Sul in 2022/23 and 2021/22. The last thing the farmers in the state need is another drought in 2024/25.