The Van Trump Report

Brazil’s Second Crop Corn Troubles…What You Need to Know

Brazil’s corn crop has been one of the most closely watched in all of agriculture this season as weather has wreaked havoc on the country’s growing regions. Brazil’s unusual three-crop cycle adds to the difficulty of trying to forecast total production with harvest happening in one part of the country while a different area is just getting the crop planted. It’s been especially complicated this year by the La Niña weather phenomenon that caused extreme conditions to varying degrees that impacted different parts of the growing cycle, depending on the region.

Before getting into what has ailed Brazil’s corn crops this year, here’s a little refresher on how they break down:    
First Crop – The corn crop in southern Brazil is considered the first of what are really three annual corn crops. Corn in the south, also known as “full season” corn, is typically planted between September and December and harvested between January and May. Key first crop production states include Minas Gerais, Rio Grande do Sul, and Parana, typically the three largest volume wise, followed by Santa Catarina, São Paulo, and Goias.

Second Crop – Farmers in the Center-West region grow second crop corn, also known as “safrinha” corn, after harvesting soybeans. It is typically sown between January and March, then harvested between June and September. It accounts for around 75% of Brazil’s corn production and virtually all the country’s corn exports. The ideal planting window is short and closes between mid-February and mid-March. This harvest usually starts hitting export markets from June onward. Second crop production comes primarily from Mato Grosso, Mato Grosso do Sul, Goias, and Parana. Note that Goias and Parana are also big first-crop corn production states.  

Third Crop – In late 2019, Brazil’s agricultural statistics agency, the National Food Supply Company (CONAB), also defined a third corn crop in the country. This corn is primarily planted in the northeastern states of Sergipe, Alagoas, and the northern part of Bahia, an area collectively known by the acronym Sealba, as well as small amounts of production in the northern Brazilian states of Roraima and Amapa. This is the latest of the three crops and resembles the U.S. production cycle, planted between May and June and harvested in October and November. Third-crop only accounts for about 1% of Brazil’s total corn output and around 2% of the area.

Brazil’s troubles started with extreme dryness caused by a La Niña weather pattern that left the southern half (first-crop corn area) under drought conditions from August through November of 2020. Farmers that planted early ran into even more trouble as the rainy season then got off to a late start. From December through February, rainfall was above-average, relieving some worries about the crop but not in all areas. USDA’s Foreign Ag Service post in Brasilia says farmers in regions of the southern states saw huge yield losses. The FAS estimates first crop corn in Rio Grande do Sul witnessed a -10.5% yield loss compared to last year, while Parana and Santa Catarina saw reductions of approximately -13% and -30% respectively.

FAS Brasilia post pegs first-crop production at 23 million metric tons in its most recent update. That compares to CONAB, which recently increased its estimate for the crop by +1.02 million metric tons to 24.51 million. Post notes that the production hiccups are causing worries for the poultry and pork sectors, especially in Santa Catarina, home to some of the country’s largest operations. Santa Catarina only produces about half as much corn as what its livestock industry utilizes.    

Dry conditions that troubled first crop corn also delayed planting of the soybean crop, which in turn led to a late harvest. That meant a late start for second crop corn planting, with many producers getting the crop in the ground well beyond the ideal planting window. Post notes that producers have been motivated to risk pushing the boundaries by record-setting corn prices.

Second crop planting was mostly complete as of April 3, according to CONAB data, but the crop still has a lot of weather ahead. Late planted corn is always at risk of running out of moisture before maturity as the second-crop window butts up against Brazil’s dry season. In some of the southern-most states, the crop might also face freezing temperatures before it’s ready for harvest.  

Despite all the production hiccups, FAS Brasilia left its total corn production forecast unchanged at 105 million metric tons, though that is -4 million less than USDA’s official estimate of 109 million. That’s also higher than 2019/20 production of 102 million metric tons, a year that was also plagued with worries about overly dry conditions. However, post’s export estimate of 37 million metric tons for Brazil is -2 million less than the official USDA estimate of 39 million. Again, both estimates exceed 2019/20 exports of just over 35 million metric tons. As for 2021/22, FAS post set its initial estimate for Brazil’s total corn production at 114 million metric tons with exports pegged at a whopping 40 million. The full report is HERE.

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