South America Calling

Brazilian farmer confidence has grown over the last three months, reflecting rising prices.

Sao Paulo University's Farmer Confidence Index reached 104.3 points in April, indicating a mildly positive sentiment (a 100-point reading reflects neutral sentiment).

But notable was the 12% rise in the index since the last sounding in January with optimism about prices offsetting concerns about rising input costs and the state of the crop after a severe drought hit the southeast and part of the south this summer.

The sub-indices showed that farmers are preparing to invest more in inputs but will clip outlays on equipment.

The inputs sub-index rose 4% to 129.3 points in April amid increased spending in controlling pests, particularly caterpillars in the case of soybean farmers. The equipment sub-index fell 3% to 66.1 points as purchases of tractors and combines slow following the equipment investment bonanza of recent years.

The Soybean Producer Confidence Index sat at 114.5 points, stable compared with January. Again, positive sentiment about prices offset the negative vibe caused by significant drought-related losses this season.

(AG)

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