USDA Underestimates South American Crop Loss
Brazil may need to import corn if dry weather continues.
Mike Wilson
Published: Feb 15, 2012
FOZ DO Iguaçú –A Brazilian grain analyst believes USDA has underestimated the growing losses in both soybeans and corn taking place now as a result of severe drought in Southern Brazil and Argentina.
USDA's recent report estimated Brazilian corn production at 61 million tons, which would be close to last year's actual production level. "I don't see this corn being harvested. I completely disagree with this number," says João Carlos Kopp, a market analyst and consultant working with farmers in Brazil.
Kopp's own estimates, working with several farmers around the country, come to 50.9 million tons, including expected losses of 30% in Rio Grande Du Sol and 30% loss in Paraná, the country's leading corn state.
The worst cases scenario – if dry weather continues – is a 26% drop in yield to 45 million tons. That would include expected losses of 50% in Paraná and 50% in Rio Grande Do Sol.
"If that is the case, we don't have enough corn to feed our people and livestock production," he says. "We import U.S. ethanol, we may also need to import your corn." The Brazilian government has only 2.5 million tons corn in carryover, he adds.
He believes Argentina corn will come in at between 13 million tons and 21 million tons; soybeans will come in at around 45 million tons.
He projects 65 million tons of soybean production in Brazil, down from USDA's estimate of 72 million tons. "If dry weather continues until March, we should have severe damage in most of the soybean states," he says. "In the worst scenario we could think of a number below 63 million tons."
Julio Bergamasco has already felt the impact of the Brazilian drought. He farms 750 acres near Foz do Iguaçú, Parana, a southern Brazilian region hard hit by drought. Despite no-tilling everything – a practice that contains moisture - his soybeans ended up yielding about 22 bu. per acre, barely a third of the typical 63 bu. per acre yield he's accustomed to.
"This is the first time in all the years I've been farming we've had a dry season like this," he says. "We had one rain in December, one in January, and that's not at all normal for us."
About 80% of Paraná state was impacted by drought, and this is the second best soybean producing state in Brazil after Mato Grosso.
Estimated production
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USDA recent report
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Brazil/Argentina national crop reporting agencies
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JCKOPPCONSULTING
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SOYBEANS
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BRAZIL
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72MT
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69,6 MT
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65MT
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ARGENTINA
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48MT
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47MT
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45MT
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CORN
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BRAZIL
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61MT
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60,8MT
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51MT
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ARGENTINA
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22MT
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21MT
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18MT
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Tagged: usda, soybeans, Drought, soybean, ethanol
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