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May 5, 2017

2017 Wheat Acreage in Parana to Decline 8-10%

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

Farmers in Parana, which is Brazil's largest wheat producing state, have started to plant their 2017 winter wheat crop and it is estimated that 15% of the wheat has been planted. Farmers in the state are not animated at all about their wheat crop due to the low prices they received for their wheat last year and the prospect once again of low prices.

The Department of Rural Economics for the state of Parana (Deral) is expecting that the farmers in the state will reduce their wheat acreage by 8-10% compared to last year. The director of Deral, Francisco Carlos Simioni, attributes the reduced acreage directly to the low prices.

Farmers in the state lost money on their wheat crop last year and the situation does not look much better this year. As a result, many farmers decided to plant more safrinha corn and barley instead. There is some competition for acreage between winter wheat and safrinha corn especially in central Parana. Most of the wheat is planted in southern Parana and most of the safrinha corn is planted in northern and western Parana, but in central Parana, farmers could switch back and forth depending on economics.

The safrinha corn acreage in Parana is expected to increase 8% to 2,275,000 hectares and if there is good weather during the growing season, the safrinha corn production is estimated at 13.8 million tons or 34% more than last year.

In 2017, farmers in Parana are expected to plant 1.02 million hectares of wheat which represents 50% of Brazil's wheat acreage. The second largest producer is the state of Rio Grande do Sul which is expected to plant 0.77 million hectares, or 38% of Brazil's total.

Wheat yields in Parana are expected to be down this year due to the fact that farmers will economize on inputs. Conab is estimating the Parana wheat yield at 2,837 kg/ha (41 bu/ac) or down 9.6% compared to the yield of 3,140 kg/ha (45.5 bu/ac) last year. The 2017 wheat production in Parana is expected to be 2.9 million tons or 14.7% less than the 3.4 million tons produced last year.

For all of Brazil, Conab is estimating the 2017 wheat production at 5.4 million tons, which is down 18.7% compared to the 6.7 million tons produced last year. Brazil always has a deficit in wheat production and the country is expected to import 6.2 million tons of wheat in 2017 to satisfy the domestic demand.