With farmers harvesting a bumper crop this season, strong demand for freight has pushed up the cost of transport from Brazil's far-flung state of Mato Grosso.
With warehouses still full of corn from last season's winter crop, farmers are desperate to move grains to the port and trucking companies are taking advantage by hiking prices.
According to reports from the Mato Grosso farm group Famato, freight costs are 25 percent higher than the same period last year, at an average of $125 a metric ton.
This is the equivalent of $3.40 a bushel, pushing farmgate prices in many regions of the state to under $6.80 a bushel, which is below breakeven of $7/bu on farms with yields of 45 bushel/acre.
With around 60 percent of the harvest in Mato Grosso still to be harvested the tendency is for freight costs to rise even further in coming weeks.
Adding to farmer woes, some parts of Mato Grosso state have received excess rain this month, which delays harvest, affects bean quality and increases moisture content.
In the west of the state, which received more than 20 inches of rain so far this month, farmers are harvesting beans at 28 to 30 percent moisture content, compared to a normal level of around 16 percent. This will lead to higher drying costs and bigger discounts on prices received by farmers.
Once again it seems Mato Grosso farmers will harvest a huge crop, around 18 million metric tons, but will have little profit left over when all is said and done.
Poor logistics and long distance from the port, lack of capital and credit, high pressure from Asian Rust disease, and insufficient storage space are just some of the reasons farmers are unable to make a profit in Mato Grosso, which is responsible for nearly one third of Brazil's soybean production.
Conditions are better in the country's second largest soybean state, Parana, which is much closer to the port, and where farm units are smaller and mostly self financed. Storage is also more plentiful in Parana, where most farmers have on farm storage, or are members of a cooperative, and can bide their time before selling beans.
