Brazil Anticipates Record Crop but Less Profits

Soy plantation in Brazil The Agriculture minister of Brazil, Reinhold Stephanes, anticipated a "record 2008/09 grain crop" close to 144.5 million tons which would mark a new record, and discarded that the global financial crisis would have an impact on agriculture on the short term.

Stephanes made the announcement during the presentation of the latest Brazilian Supplies company report, which is issued by his ministry. "The crop will be between 142.03 and 144.55 million tons, compared to 143 million in 2007/08," he stated, adding before the Agriculture and Supply Congressional Committee:

"In six months time, when crops will be harvested we'll have a more clear scenario about the crisis and international prices, meantime we will continue to sow and if credit is short we'll provide it."

"This administration is determined to ensure agriculture continues to expand, so the money needed for loans will be available," he noted recalling that recently the Brazilian government extended US$ 2.5 billion in credit farms.

According to the report, the area with soybeans will expand 1.3% to 2.3% (anywhere between 21.585.400 and 21.999.300 hectares) while corn and cotton will suffer reductions. Soy crop will therefore be in the range of 60.106.400 to 61.274.500 tons compared to 60.017.400 in the last season.

The report also points out that because of increased costs and difficulties to obtain credit "farmers are making a more rational use of inputs, trying to take maximum advantage of the technological equipment to keep production at levels of the last few years."

Moreover grain brokers argue that the recent devaluation of the real helps to increase the area planted with soy, but at the same time falling commodity prices is not positive.

"As in Argentina production costs have soared; many inputs such as fertilizers were acquired when prices were very high. Since then there has been a dramatic slide in grain prices which has completely modified the production equation," said Adrian Seltzer from Granar S.A. a grains broker.

Seltzer also warns that "it's possible Brazil may plant more soy, since as in Argentina it's cheaper than sowing corn, but it is also highly probable that prices won't be enough to fertilize as they should or apply sufficient fungicides as they should, so a greater area does not necessarily mean a larger crop."



  • Show Comments (1)

  • ch.c.

    Strange…very strange !!!!
    1)”meantime we will continue to sow and if credit is short we’ll provide it.”
    But nearly 100 % of credits to your farmers are through the BNDES…at a subsidized interest rate.
    If one look at the published amount several weeks ago, the total amount available was already higher than last year.
    Therefore quite strange that with a small growth…you would still have top provide more SUBSIDIZED loans.
    But so it is. You criticize developed nations, but do just as they do.

    2) ” This administration is determined to ensure agriculture continues to expand, so the money needed for loans will be available,”
    That is great for the world consumers…so that prices can continue to go…DOWN !!!!!!
    Or at worst….NOT UP BY MUCH !!!!!

    Yeahhhhh….no doubt that Brazil should also as planned double/triple/quadruple your sugarcane fields.

    In 2005 you sweared, promised, guaranteed and assured the world that ethanol from sugarcane is competitive to oil at US$ 35.-! Right or not ?
    By 2008 when oil prices reached US$ 150.-, most Brazilian ethanol producers were….LOSING MONEY !!!!!!
    And when oil prices later reached US$ 100.- or so, your ethanol producers…LOST EVEN MORE MONEY !!!!

    Now to my stupid questions :
    – what do you expect as PROFITS for your ethanol producers, as oil is now US$ 80.- ? Because this is still well over TWICE more than your break even costs of US$ 35.- in oil.
    – what is your PROFITS expectation for your ethanol sugar producers if oil next year will trade at let say…US$ 60.- ??????

    Hey…A BRAZILIAN……where are you ? Stand Up ! Speak Up !
    Ohhh dear junkie…A Brazilian…to my knowledge the USA/EU/Japan are NOT subsidizing their OIL PRICES !!!!!!!!!
    And also to my knowledge, your sugarcane farmers got tens of billions in SUBSIDIZED INTERESTS RATES ON LOANS !!!!!

    Yessssss…prove me wrong if you can on what I wrote above !
    Yessssss…please please, with a knee down I am begging that you prove me that Brazilians are NOT…CHEATERS AND LIARS…AS USUAL..AS I SAID SO MANY TIMES…AND ACCUSATIONS YOU DEFINITELY REFUTED !!!!!

    Waiting anxiously and impatiently the answers and comments…from your FLAT brains !!!!!!

    πŸ˜€ πŸ˜‰ πŸ˜€ πŸ˜‰ πŸ˜€ πŸ˜‰ πŸ˜€ πŸ˜‰ πŸ˜€ πŸ˜‰ πŸ˜€ πŸ˜‰ πŸ˜€ πŸ˜‰ πŸ˜€ πŸ˜‰ πŸ˜€ πŸ˜‰ πŸ˜€ πŸ˜‰ πŸ˜€ πŸ˜‰ πŸ˜€ πŸ˜‰ πŸ˜€ πŸ˜‰ πŸ˜€ πŸ˜‰ πŸ˜€ πŸ˜‰ πŸ˜€ πŸ˜‰ πŸ˜€ πŸ˜‰ πŸ˜€ πŸ˜‰ πŸ˜€ πŸ˜‰ πŸ˜€ πŸ˜‰ πŸ˜€ πŸ˜‰

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