South America Calling

Brazil's Soybean Planting Delays to Pressure Logistics

The planting delays caused by the late arrival of spring rains in Brazil's Mato Grosso and surrounding states will concentrate the harvest and put enormous pressure on the country's already-overstretched logistics, farm and industry leaders warned.

"All the soybeans are going to hit elevators and the ports at the same time. That is going to cause a big problem because we don't have necessary infrastructure," said Manoel Pereira, chairman of Abiove, the soy industry association.

Thirty days behind schedule, soybean planting finally accelerated in the Center-West region last week following a series of showers and forecasts of more rain in the coming weeks.

Soybean planting jumped from 20% to 40% complete last week in Mato Grosso and, with farmers planting day and night to get the crop into the ground within the optimal planting window, field work could be nearly complete in two weeks.

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This will potentially lead to a tremendous number of soybeans being delivered in mid-to-late February.

This is bad news as the elevator, road, rail and port infrastructure struggles to deal with Brazil's massive grain crops at the best of times, and the cost of transporting grain from deep in the interior to ships at port is already up to four times higher than in the U.S. The concentration of the crop will only exacerbate that problem.

Brazilian grain infrastructure has improved over the last five years but growth in production is outstripping the investment, notes Ricardo Tomczyk, president of the Mato Grosso Soybean and Corn Growers Association (Aprosoja--MT)

Brazil is expected to produce a crop that is 5% to 10% larger than last year at 91 million to 96 million metric tons. Around one-third of the crop will be produced in Mato Grosso.

Most of that additional production will be exported, putting pressure on Brazil's already overstretched ports. Shipments are exported to grow through northern ports, but these corridors are still being established.

"It may be another difficult years with farmers faced with difficulty delivering their soybeans," said Tomczyk.

The other concern facing farmers is that they will be harvesting later than normal, which will expose them more to Asian rust. The fungus gets more active as the season goes on, and the late planting could mean farmers have to spray more, Tomczyk noted.

(AG)

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