South America Calling

We have seen Brazil's soybean planting progress at unprecedented speed this season.

Farmers planted 29 million acres over the last three weeks so that, after a slow start in September, fieldwork is now ahead of schedule.

This agility has much to do with investment in machinery.

And, judging by the latest farm machinery data released Tuesday, it seems harvesting will be equally rapid.

Combine sales totaled 6,381 units in the first 10 months of 2013, up 43% on the year, according to the Brazilian Auto Manufacturers Association (Anfavea).

Tractor sales have also spiked, up 20% to 56,813 units in the same period.

Well-capitalized farmers have opted to spend spare cash on operations, stimulated to do so by subsidized credit from the Brazilian Development Bank (BNDES).

Anfavea forecasts sales of all farm machinery will rise 18% to 83,000 units in 2013.

The agility that extra machinery offers is particularly important to farmers in the fast-growing Cerrado region, who have a tight window to double-crop soybeans and corn effectively.

Not only do they have to plant soybeans quickly in September and October, they must be very nimble to harvest during breaks in the tropical rains that fall in January and February. They do all this in order to plant second-crop corn early enough for it to navigate key growing phases before the winter drought starts in April or May.

With corn prices low this year, planting a second crop is less of a priority. But there remain distinct advantages to planting soy early. By harvesting soybeans in February, farmers get the crop out of the field before the worst of the Asian rust and pest attacks that intensify later in the season and present a massive problem to farmers.

The concentration of the harvest season, combined with larger crops, is putting enormous pressure on the already overstretched receiving capacity at elevators, co-ops and trading companies.

The problem, as one cooperative official recently told me, is that industry simply hasn't kept pace with farmer investment.

Brazil is expected to produce 87 million to 90 million metric tons this season, roughly the same as the U.S.

(AG/GH/BAS)

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