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‘The Market Ate Our Profit,’ Brazilian Soybean Farmer Says
SAO PAULO, Brazil-- With the occurrence of rains in recent weeks, the planting of the Brazilian soybean crop 2017/2018 managed to accelerate.
However, farmers are worried about the soybean growing window and the low profitability.
“Because of soybean planting delay, we won’t harvest until after February 20. Harvest is always strong here in early February; this season harvest will be at the end of February. That has never happened,” says Brazilian producer José Nardes, who grows 2,000 hectares (4,942 acres) of soybeans in Primavera do Leste, in Mato Grosso, the largest soybean producing state.
The Brazilian producer says that the delay of the planting will have a negative impact on the crop. “The rain was delayed and it came very sporadically. This already compromises the production of soybeans. Depending on the region, it is already expected to drop yields,” he says.
Nardes is president of the Rural Union of Primavera do Leste, which represents about 700 producers. Having grown grains grains in this region since 1984, he says this season he needed to replant 150 hectares because of the lack of rainfall. “It was the first time I had to replant. The crops are in a regular situation. It’s not raining as much as we need. I hope [the weather] normalizes from December to January. Production will depend on the weather.”
Another complaint from Brazilian producers is the price of soybeans, considered low. According to Nardes, the 60-kilo bag of soybeans, which was traded around R$ 75 ($23.25) in the last crop, is currently marketed in Primavera do Leste for R$ 61 ($18.91) to R$ 62.
“The price of soybeans doesn’t pay the cost of production. The market ‘ate’ our income. There are a lot of producers with financial problems in the region,” says the producer. “We are working without income. There was no reason to get to what arrived, they are manipulating the price.”
The current exchange rate also weighs against the Brazilian producer. “We are exporters and the devalued dollar is very disruptive, it breaks the sector,” says Nardes. With this scenario, he says until now only sold 10% of the 2017/2018 soybean crop. “The cost is within the average, around R$ 2,500 ($775.05) per hectare. The problem is the low price of soybean [in Brazil]. The price is very bad,” says the Brazilian producer. “I’m more pessimistic than optimistic about everything that’s going on in the country.”
The planting of the 2017/18 Brazilian crop reached 84% of the total estimated area on November 23, according to the latest AgRural survey. The planting is in the final stretch in the states of Mato Grosso do Sul (99%), Paraná (96%), and Mato Grosso (96%). “The rains have improved and the planting has been aligned within the average,” says Daniele Siqueira, market analyst at AgRural consultancy.
Despite this, Daniele confirms that the producers are in an uncomfortable situation.
“The 2017/2018 season is more difficult in terms of profitability. And the producer in the Midwest suffers more because logistics are more expensive,” says Siqueira. “In general, marketing is slower because producers are expecting better prices,” she says.
According to Siqueira, the National Supply Company (Conab) estimates exports of 65 million tons of soybeans in the 2017 trading year. However, from January to November 24, 2017, the year’s estimate was exceeded, with exports of 65.3 million tons of soybeans. “The large crop we had in the 2016/2017 season encouraged exporters,” says AgRural’s market analyst.
* Calculations made with an exchange rate of R$ 3.22 per dollar.