Paraguayan Exporters Prefer Soybeans to Corn
Reading time: 2 minute
Paraguay has two distinct Corn crops. The summer crop, called Zafra, which is planted in August and harvested in late January, usually covers a small acreage ranging between 30,000-60,000 hectares yearly. With typical weather, farmers can expect to produce average yields of about 8 tons per hectare. Some beef and dairy producers plant Corn during this time to make silage for feed. Additionally, some small local Corn seed producers, who produce seed called casera, meaning homemade, plant during this early season to have seed ready to plant the second Corn crop called zafrinha in February of each year.
During the zafrinha crop, farmers plant significantly more Corn, usually planting in fields that were recently harvested from Soybeans. Zafrinha Corn production has grown in popularity, partially as farmers have begun to consider the long-term negative consequences of growing two Soybean crops in a year and see the benefits of crop rotation between Corn and Soybeans. Average yields in the zafrinha crop are highly variable and dependent on the weather, which can easily and rapidly change the condition of the crop. Generally, farmers expect yields to range between 5-6 tons per hectare.
During normal years, roughly 80 percent of the Corn area is planted with high-quality commercial hybrids developed by multinational seed companies. Most seed is imported from Brazil. The remainder is casera seed produced locally. In MY 2022/2023, contacts believe that due to the lack of abundant seed in Brazil and the higher production costs, the use of lower quality seed could expand significantly as its cost is about one-third of a branded hybrid seed, despite yielding less.
Paraguayan Corn production in MY 2022/2023 is forecast at 4.5 MMT, a significant drop from the abnormally high production in MY 2021/2022. This is due to a projected smaller planted area as the zafrinha Soybean crop is expected to return to a more normal acreage if weather conditions allow. With good Soybean seed supply and typical weather, the Corn area is forecast to drop to 820,000 hectares, more in line with historical levels.
Corn exports in MY 2021/2022 were forecast at a record 4.4 million tons due to an expected bumper crop. There are some discussions if Paraguay can handle such a significant export of Corn, but a significantly smaller Soybean crop (less than half of its average volume), will make room at town elevators, trucking companies, port facilities, and barges.
Paraguayan Corn Acreage
In MY 2021/2022, the Corn planted acreage rose dramatically, primarily due to the severe drought in late 2021 and early 2022, which significantly diminished the Soybean crop and thus, the availability of seed to plant the zafrinha crop in January and February. As a result, farmers opted to increase the Corn area. Although Corn acreage has been growing year after year, most farmers still prefer to produce as many Soybeans as possible because of the preference given to elevators and exporters. In contrast with Argentina, production costs are pretty similar as Corn and Soybean crops demand large volumes of fertilizer in Paraguayan soils.
The availability of fertilizer for the Corn crop in MY 2022/2023 remains a concern. Retail prices of fertilizers have more than doubled in the past year, significantly increasing production costs. While a significant portion of the coming year’s fertilizer needs is already in the country or under contract, fertilizer companies still need to contract additional volume and accept delivery of priorly purchased shipments. This may prove more challenging than usual due to global supply and distribution challenges. Farmers intend to plant regardless of the volume of fertilizer they can afford or obtain.
Other sources: USDA
Try AgFlow Free
Access Free On Updates for Corn, Wheat, Soybean,
Barley, and Sunflower Oil.
No Credit Card Required & Unlimited Access In Time
