South America Calling

Drought Hurts Brazil Bahia Crop, Late Planting Limits Losses

There are two certainties in farming soybeans in Bahia.

The first is there will be pest attacks and the second is there will be a dry spell somewhere in the middle of the crop cycle.

Sure enough, both occurred this season in this part of Brazil's eastern Cerrado.

"We had nearly 20 days without rain in January and only 1 and a half inches all month. It was tough," said Eduardo Magerl, who farms 6,000 acres in Formosa do Rio Preto, northwestern Bahia.

Travelling through the region, as well as Minas Gerais and eastern Goias, with the Rally da Safra crop last week, we could see soybeans had experienced stress. But visiting the massive farms typical of the region, it was also obvious that crops had staged something of a comeback.

"To be honest, the crops have recovered pretty well and look pretty good as we near harvesting," said Mr. Magerl.

The whole of Brazil's top-producing Cerrado region suffered amid an extremely dry January, even the perennially damp state of Mato Grosso was hit, causing analysts to cut Brazilian crop forecasts in the first two months of the year.

Bahia was one of the worst-affected states. As a result, Agroconsult, the local farm analytics firm that runs the Rally da Safra, currently pegs the state's average yields at just 39 bushels per acre. However, the abundant rain that has fallen in February and March has allowed the crop to recover and the consultancy may have to raise its forecast, said Fabio Meneghin, the Agroconsult director leading the tour in Bahia.

Bahia produces approximately 4% of Brazil's crop, which Agroconsult pegs at 94.8 mmt for 2014-15.

Bahia's crop was saved by the fact that, unlike most parts of Brazil nowadays, farmers predominantly plant medium- and long-cycle beans and also they plant later in November.

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As a result, the dry spell hit a large percentage of the crop in the vegetative development stage.

"It could have been a lot worse around here," said Raphael Abe of the Impar agronomic consultancy, which is based in the region.

The worst hit parts of the state were in the south and the east.

Two years ago, the Helicoverpa armigera caterpillar famously infested crops in Bahia after an extended dry spell. But this year the biggest problem is the looper caterpiller.

That's not to say the Helicoverpa, or the Heliothis, caterpillars have gone away. Also marking their presence of Bemisia tabaci, a silverleaf whitefly, and stink bugs.

According to Impar's Abe, the dry weather in January, followed by the return of rains created conditions conducive to the spread of caterpillars and other pests.

It means that farmers must make up to 8 insecticide applications during the soybean cycle. That figure has doubled in the last five years.

"You can't take your eye of the crop. You always have to look for pests," said Abe. "The pressure is growing. It's one of the big challenges of tropical farming."

Pests have not caused major losses to crops but battling them has come at a cost. Farmers now typically spend substantially more in crop chemicals than fertilizer.

In Luis Eduardo Magalhaes, western Bahia, a farm spends an average of R$513 per hectare ($64 per acre) on chemicals compared to R$401 per hectare on fertilizers, according to Agroconsult.

Farmers have Monsanto's new BT soybean technology, Intacta RR2 Pro, to combat caterpillars.

Used commercially for the first time in 2013-14, Brazilians are taking to Intacta quickly. The seeds were used in 15% to 20% of soybean crops across Brazil this season, according to market estimates, although tests during the Rally da Safra indicate the percentage may be 25% to 30%.

According to farmers, Intacta reduces the number of applications of insecticide to around 5 in Bahia and is also registering better yields.

It's more expensive so the financial advantage of using it may not always be that great.

"But it also makes life easier, which is important," said Caetano de Carvalho Berlatto, who runs the family farm of over 10,000 acres in Roda Velho, western Bahia.

The worry is that Intacta will lose resistance as quickly as the first BT corn in Brazil, which ceased to be effective after three to four years.

That's because Brazilian farmers simply don't employ refuges. At present, it's not a problem due to the low use levels but Intacta could be employed in as much as 50% of the Brazilian crop next year and resistance could start developing.

Monsanto is running an intense campaign to convince farmers to start with refuges but they may have to lose the Intacta technology to learn the lesson.

Bahia used to be at the frontier of Brazil's grain expansion with corporate farms prominent in converting land and creating huge properties -- the average size is approximately 5,000 acres but farms can top 250,000 acres. Twenty years after the first wave of conversion to soy farming, agriculture is well established in the region but we still saw various areas in expansion.

I visited one vast properties owned by Agrifirma, a U.K./Brazilian corporate farm, where planting had expanded from 12,300 acres to 20,000 acres this season and where another 44,000 acres would be brought into production in the coming years.

The crops that I saw on land converted in the last couple of years rarely registered yields above 35 bushels per acre, despite the sophistication of many operations. But those results will improve with time.

(AG)

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