La Niña concerns increase among Brazil’s soybean producers

RIO DE JANEIRO, BRAZIL – The impact of the La Niña weather phenomenon, which is expected to shake world food markets in the coming months, is starting to be felt in parts of Brazil, the world’s largest soybean exporter.

In 20 years as a soybean farmer, Adriano Marco Vivian has never seen his fields so dry, with leaves burnt by excessive heat and lack of rain. La Niña can mean drought in many growing areas, including southern Brazil.

“I think about 70% of the yield potential has been lost,” said Vivian, based in Parana, one of Brazil’s largest producing states.

“We haven’t had widespread rains in over 60 days,” the farmer said, who planted 700 hectares of soybeans in the west of the state. The picture is similar for all producers in the region, he said.

Dry conditions and heat led DERAL, Parana’s agricultural agency, to cut its production estimate in the state by 12% on Wednesday, and it could be higher if adverse weather continues, said agency economist Marcelo Garrido.

The prospect of a second straight La Niña trimming what’s otherwise expected to be a bountiful harvest is helping boost soybean prices and adding to worries over global food inflation.

Some local consultancies have already cut Brazil’s soybean output estimate due to yield losses in the south. That is the case of Parana-based AgRural, which cut its production estimate to 144.7 million tons, from 145.4 million in the previous forecast.

For now, Parana farmers were an exception in Brazil, where favorable weather has allowed good crop development in the central and northern areas.

“Brazil is still expected to get a record crop,” AgRural analyst Daniele Siqueira said. “Paraná is the only region with consolidated losses so far.”

All eyes will remain on southern Brazil. Rio Grande do Sul, a high-growth state on the border with Argentina, reported below-average rainfall during planting, which is almost over. Some farms needed to be replanted, but yields will not be known until next year. If abundant rains fall from now on, the state could still record a good crop.

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