Paraguay Corn: $800-900 Production Cost per Hectare
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Post projects Paraguay’s MY 2023/2024 production at 5.5 MMT, the second-highest volume on record. Planted area is forecast to increase to 920,000 HA, 50,000 HA than in MY 2022/2023, but if good conditions persist, it could expand even more. The planting of Corn depends on the timing of the harvest of the leading soybean crop, which usually takes place in January. If done on time (sometimes it is delayed because of late planting or bad conditions at harvest), Corn is planted in February, and it is usually the preferred choice vis-à-vis the second soybean crop.
Some farmers still prefer to plant soybeans as their cycle is shorter (approximately 90 days from planting to harvest at the end of May) and escape potential early frosts in June. However, Corn is a crop now well established with the value of providing crop rotation in a very soybean-dependent agricultural system. The expansion of the domestic ethanol sector ensures demand and allows farmers to market low-quality Corn if it is affected by bad weather conditions. Apart from the zafrinha Corn, a small area of Corn is typically planted in August, but its production usually does not enter the commercial chain.
The Corn planted area in MY 2022/2023 was smaller than farmers had planned because the soybean harvest was delayed. Therefore, contacts indicate that there is Corn seed available from this crop which will be used in the MY 2023/2024. Roughly 75-85 percent of the area is said to be sown with hybrids developed by reputable seed companies, and the balance is planted with seed produced locally called “camera” or homemade, which yields not as much, but is significantly less expensive. Most hybrids used are bred for sub-tropical environments such as that of Brazil.
Local seed companies are introducing to the market seed with germplasm with higher yield potentials, taking yields from a 4-7 ton per hectare range to one of 7-9 ton per hectare. Most professional farmers in Paraguay use modern technology and invest in inputs for their Corn fields, with good volumes of fertilizers and crop protection agricultural chemicals.
The Corn crop in MY 2022-2023 is estimated at 5.25 MMT with planted area of 870,000 HA. Planting, in general, was delayed, with approximately 30 percent planted in the optimal window, with the last lots being planted very late, around March 20. About half of the Corn planted runs risks of early frosts, which could eventually affect the final output.
The cost of production with farmers using their equipment was estimated for MY 2022/2023 at about $800-900 per hectare, which at an average yield of 6 tons per hectare would result in a return of about $150 per hectare. Production costs for MY 2023/2024 will be lower as world prices of fertilizers and some crop protection products have dropped significantly.
Corn Export in Paraguay
According to AgFlow data, Paraguay exported 91,890 tons of Corn to Chile in Jan-May 2023, followed by Peru (30,000 tons) and South Korea (30,000 tons). Post forecasts Corn exports for MY 2023/2024 at 3.5 MMT, the second highest ever. Brazil is expected to continue as the leading destination with 1.7-2.0 MT. In the past five years, Brazil has accounted for 50-70 percent of Paraguayan Corn exports. Buyers are typically poultry and swine plants close to the border in a radius of about 150-600 kilometers from the border.
Chile is an important destination, as well as Uruguay and Peru. These countries usually import Corn primarily from Argentina, but due to the severe drought affecting Argentina, exports are projected to drop significantly, so Paraguayan Corn is a suitable replacement.
Other sources: USDA
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