Ana Mano –
At a warehouse in the heart of Brazil’s agriculture sector, farmer Rafael Bilibio watches truck after truck line up to unload corn onto the ground outside the huge storage bins.
His own corn, ready for unloading from a 50-tonne truck that has just pulled in, is destined to join the pile that has reached 65-feet high, as the bins remain stuffed with soybeans collected earlier this year in Mato Grasso state.
“For the first time in history, producers here will pile one harvest on top of the other,” said 33-year-old Bilibio, who cultivates some 4,700 hectares of soy and corn near Vera, in the mid-North of the state.
From Iowa to China, years of bumper crops and low prices have overwhelmed storage capacity for corn, wheat and other basic foodstuffs.
The situation is dragging down farmer incomes and making it hard for traders like Archer Daniels Midland (ADM) and Bunge Ltd to make money. But here in the world’s biggest soybean exporter and the No 2 corn exporter after the United States, Brazil is seeing these stockpiles on a crop that historically has been an afterthought.
Known as Brazil’s second corn — once planted as a cheap way of resting the soil from soybeans — this year’s harvest has been so big, and prices so low, that farmers have no choice but to leave it exposed to the elements.
In Mato Grosso, the massive harvest made their options for permanent storage even more limited, as part of the record soybean output still sits in silos while producers wait for prices to rebound.
The pile-up underscores a lack of preparation for these massive harvests in Latin America’s largest economy, where chronic logistical bottlenecks have been worsened by farmers’ refusal to sell amid slumping prices, with far-reaching effects. Brazil’s stockpiles are exacerbated by the extra corn crop its climate allows, which is set to reach a record 66.6 million tonnes this year out of a total 97.2 million tonnes.
Growers say the grain stocks may still be there when the next soy harvest arrives in January, while carryover volumes for both commodities will end the crop season at a record high, according to government and private estimates. The pattern of soy hoarding has been repeated across Brazil, pushing local soybean prices down about 23 per cent from 69 reais a bag in August 2016, according to Mato Grosso’s agricultural research institute Imea. Farmers’ reluctance to sell crimped margins for ADM and Bunge Ltd last quarter as the grain traders had to pay more than they expected for soybean supplies to meet commitments. — Reuters
Ana Mano –