2021/22 Soybean crop in Paraguay was worst in modern history

Farmers in Paraguay have completed the harvest of their 2021/22 soybeans and according to the Soybean, Oilseed, and Cereal Produces Association of Paraguay (APS), this has turned out to be the worst soybean crop in the modern history of Paraguay. A severe drought during the months of December and January, coupled with record high temperatures, reduced the soybean crop by 70%.

At the start of the growing season, APS expected Paraguay to produce more than 10 million tons of soybeans. Currently, they are estimating that the soybean crop may not surpass 3 million tons. Nationwide soybean yields are expected to be 16 sacks per hectare (14.3 bu/ac) with the best yields peaking at 26 sacks per hectare (23.2 bu/ac).

Farmers in Paraguay are allowed to plant a second crop of soybeans (safrinha) after the first crop is harvested, but farmers are plating less safrinha soybeans than expected. Originally, farmers were expected to plant 500,000 hectares of safrinha soybeans, but it now appears that they will plant 300-400,000 hectares. The safrinha production is expected to be used as seed for the 2022/23 season and to fulfill some existing contracts.

May farmers who forward contracted some of their 2021/22 production now cannot deliver enough soybeans to the grain companies to satisfy those contracts. They also cannot pay their production loans from the bank or their input supplies.

These financial difficulties are going to impact the 2022/23 crop as well, which they will start planting in August. It is going to be very difficult to purchase inputs, especially since input prices have surged in recent months. Farmers will probably use their scarce resources to purchase the minimum fertilizers and chemicals possible to produce a crop which could put the 2022/23 soybean yields in jeopardy.