Brazil Corn Production Estimate Overly Optimistic

February 9, 2012

Brazil corn production would reach a record 61 million metric tons this season, allowing for corn exports of 9 million tons,  based on  USDA new estimates.   With worsening drought in South Brazil the corn outlook is too high.  

Expectations for  high corn production are based heavily on Mato Grosso, now the second biggest corn state in Brazil.  Corn is grown as a second crop in this tropical farm state,  planted after soybeans are harvested.     Drought losses in South Brazil, owing to La Nina,  may overshadow gains in Mato Grosso dragging Brazil corn production lower.

The USDA new production estimate for Brazil corn in 2011-12 is optimistic with drought in South Brazil:

 

 

Corn Cultivation Increasing in Tropics

The distribution of corn production in Brazil has changed, now featuring much bigger production in the tropical states, at the expense of the South.   The shift into the tropics has occurred over the past several years.

Parana is still  the country’s largest corn state growing 25% of the national harvest.  Mato Grosso is now the number 2 top corn state making up 15% of Brazil corn.  That compares with a 5% share 10 years ago. 

Minas Gerais  has risen to the number 3 top producer now accounting for  12% of corn production and  dropping Rio Grande do Sul into 4th place with 9%.   Tropical states Goias and  Sao Paulo together produce 15% of Brazil corn.

Needless to say, the corn map we've been using is terribly out of date and not very useful.  

 

 

South Brazil Drought Growing Severe

A poor corn harvest in Parana and Rio Grande do Sul may drag the national harvest lower, offsetting corn increases in the tropics.    Such was the case in the 2008-09 growing season, the analog for South Brazil drought. 

Extremely dry conditions have developed in Parana, Rio Grande do Sul and Santa Catarina over the past 3 months:

 

A similar dry pattern developed in South Brazil in 2008-09,  though the drought was less extreme.  This was another instance of La Nina:

 

The  Brazil corn harvest shrank to 51 million metric tons in 2008-09,  compared to 58.6 MMT the previous season, a 13% shortfall.  Scroll up to see Brazil corn production history. 

Big losses came from Parana, the top corn state, where production fell 25%.  Rio Grande do Sul corn was down 20% and Santa Catarina  18% down on the season.  See Parana corn losses below.

 

Mato Grosso made a bumper corn harvest but it was not enough to offset losses in South Brazil.  Mato Grosso corn production even set a record in 2008-09. 

 

Drought Lingered into Southern Hemisphere Fall

South Brazil dryness dragged on in February and March 2009, sealing in a poor corn harvest.  See lingering dryness on the map below. 

In summary, drought losses in South Brazil corn may be worse than expected and not consistent with the  record Brazil corn estimate given in the February USDA report.  If drought lingers in  February-March  it would  further worsen corn prospects.