Brazil: concerns about profitability crop season 2016/2017

Brazilian soybean farmers are worried about their profitability. It is expected to be recovered in the 16/17 crop season which will start in the coming weeks.

 

According to the president of Aprosoja, an organization which groups soybean producers, in Mato Grosso farmers have difficulty accessing credit and financing "because of the bankruptcy" last season.

 

“El Niño” phenomenaaffected the productivity of soybeans and corn by poor rains, The economic performance of producers was hurt and it caused a debt situation.

 

Current forecasts expect the arrival of the phenomena “la Niña” that could have rain within normal limits and if this happens crops will have good productivity.

 

Last season, farmers in Mato Grosso had a loss of 1.2 million hectares as a result of the lack of rain. For the next season is estimated to reach 29.4 million tons of soybeans, nearly two million tonnes above the 15/16 crop season. 

 

Besides the weather conditions, the Brazilian soybean farmers are concerned about changes in the price of soybeans. In Chicago prices are falling and if Brazilian economy recovers the dollar will reverse. 

 

According to Aprosoja, soybean´s price fell 7,5% in 40 days. This is approaching the cost of production.

 

It is expected good harvest production in Brazil and Argentina. In addition to that, if the record in the United States is confirmed it will have a surplus of soybeans in the world even if stocks are low and it is worrying,

 

Regarding credit and financing needs, Mato Grosso producers called for refinancing debts, especially for the regions that were most affected by the lack of rain.

 

Concerning Brazilian farmers´ expectations of the current government, Aprosoja expressed confidence that changes may be favorable. They believe that production costs would be corrected and environmental standards could be relaxed, which is criticized by environment entities.