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October 14, 2016

Mato Grosso Corn Acreage Unchanged in 2016/17, Yields Improve

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

Farmers in Brazil are in the early stages of planting their 2016/17 soybean crop, but there are already estimates concerning the safrinha corn acreage, which will be planted after the soybeans are harvested. In the state of Mato Grosso, which is the largest corn producing state in Brazil, virtually all the corn is planted as a second crop after soybeans.

According to the latest assessment from the Mato Grosso Institute of Agricultural Economics (Imea), farmers in the state are expected to maintain their safrinha corn acreage unchanged from last year at 4.24 million hectares.

Farmers in the state are facing a major hurdle in obtaining credit to plant the next corn crop. The yields of both soybeans and corn during the last growing season were very disappointing and many farmers were forced to renegotiate their production loans at the bank and their forward contracts with the grain companies. This is resulting in limited credit for new production loans and they ran into similar problems obtaining credit for their soybean crop. The tight credit is not expected to improve for the safrinha corn crop.

While the safrinha corn acreage is expected to remain unchanged, Imea is estimating that the yields will increase due to improved weather compared to last growing season. The summer rainy season ended in early April last growing season, which was 2-3 weeks earlier than normal. The result was very poor corn yields which averaged 74.2 sacks per hectare or 68.5 bu/ac. With a normal end to the rainy season in April/May of 2017, Imea is expecting the corn yields in the state to increase 23% to 91.5 sacks per hectare or 84.5 bu/ac. If achieved, it would be identical to the corn yield during the 2013/14 growing season which was 91.6 sacks per hectare.

As a result, the safrinha corn production in the state is expected to increase 23% to 23.2 million tons with all the increase due to improved yields.

The safrinha corn crop in Brazil accounts for 65-70% of Brazil's total corn crop and it is the safrinha corn that is the main source of corn exports from Brazil.