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January 28, 2021

Breakeven Cost for Safrinha Corn in Mato Grosso less than $2.00 bu.

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

According to the Mato Grosso Institute of Agricultural Economics (Imea), the safrinha corn in Mato Grosso was 1% planted late last week compared to 9.8% last year and 9.5% average. The slow planting progress is the result of the delayed soybean harvesting. Currently wet weather in the state is delaying the soybean harvest even more, so the safrinha corn planting may be pushed back even further.

The ideal planting window for safrinha corn in the state closes about the third week of February. If the corn is planted past that date, there is a greater risk that the corn will run out of moisture before it matures due to the onset of the annual dry season.

Imea indicated that the cost of production for the safrinha corn increased in 2020/21 due to a 30.6% devaluation of the Brazilian currency in 2020 which resulted in higher prices for imported agricultural chemicals and fertilizers. The cost of imported fungicides increased 26% in 2020, insecticides increased 23%, and herbicides increased 22%.

Even with the higher costs, the breakeven point for safrinha corn production in Mato Grosso is very low compared to the U.S. Imea estimates that the breakeven for corn production in 2020/21 is R$ 21.22 per sack or $1.82 per bushel. For the 2019/20 growing season, it was R$ 20.47 per sack or $1.75 per bushel. These costs do not include land costs. The current price of corn in the state is in the range of $6.00 per bushel.