Brazil faces crop logistics blackout
Brazil is starting to plant an expected record-large soy and corn crop, this month. Challenges are showing up in every phase of production, from purchasing fertilizers -- already facing a shortage of ships and late deliveries -- to marketing of grain - that will be dangerously concentrated in February and March. Representatives of producers and industry race against time to avoid a logistic blackout.
In addition to the expansion of the cultivated area, mainly in soybeans, the weather forecasts are positive and farmers are investing heavily in technology. The increasing of production, at a time of record prices, should be a good reason for celebration for Brazilian agribusiness -- if they have on-farm storage capacity.
Warehouses are insufficient. In the region of Lucas do Rio Verde, Mato Grosso, farmers have stored winter corn on the floor around the silos. They do not have space in warehouses to save the harvest and while they wait for the best prices.
Warehouses, roads and ports will face even greater burden than in 2011/12 across the country -- mainly in Paraná and São Paulo, states that export two-thirds of the corn and soybean produced in Brazil. Winter corn "overflowed" the silos in Mato Grosso, the main grain producer in Brazil. The problem is that, in the next season, the grains will need to be covered, due the summer rains, or transported quickly.