Brazilian farmers bet on soybeans instead of cotton

Brazilian farmers bet on soybeans instead of cotton

Brazil’s cotton production estimates for the ongoing season 2012-13 are 25 % lower than in the season 2011-12. The actual production is earmarked with 6.3 million bales as to compare with 8.5 million bales in the previous season

Also the planted cotton area decreases in the actual season, as against the previous one, to 950’000 hectares or down 35 %. The main reason is that farmers switched to soybeans promising higher returns.

Harvesting and ginning in the past season have been atypical. The second largest producing state, Bahia, harvested over a month earlier as drought conditions speeded up crop maturation and this resulted in a loss of production of 20 %. Ginning in Bahia has been completed by late September, also a moth ahead of schedule. In contrast, the major cotton producing state of Mato Grosso received rains late into the ginning season, delaying harvesting by a month. Ginning in Mato Grosso is expected to continue into December, accounting for 50 % of the national production that is estimated at a ratio of 30:70 of first to second crop cotton planted area in the 2012-13 ongoing season. First cotton crop planting begins in December, the second in January and early February 2013 following the harvest of early maturing soybeans.

Narrow row cotton planting in 45 – 50 cm spaced rows is expected to remain a viable option for large-scale producers as part of their crop rotation and should occupy between 80000 to 100000 hectares of planted area in Mato Grosso for the ongoing season. Bahia is ranked second and is responsible for over 30 % of national production.

Cotton remains a favourable high risk reward crop for large producers and groups as it generates income allowing growers to pay off large investments and to support other crops, mainly soybeans and corn, being produced on a rotational basis. Cotton production pays also dividends to soil management in the form of increased yields in alternative crop planting of soybeans and corn in rotational years. Farmers can reduce their fertilizer costs by up to 30 % when planting soybeans in areas previously used for cotton planting, another factor contributing to the large shift from cotton to soybean planted area in the ongoing season.

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