Farmers in Mato Grosso Will Need 121 bu/ac of Corn to Cover Costs

Farmers in Mato Grosso will need to produce more corn in 2024/25 to cover their cost of production compared to 2023/24 according to the Mato Grosso Institute of Agricultural Economics (Imea).

Imea estimates that the operational cost of producing corn in the state is R$ 4,589 per hectare or approximately $335 per acre using an exchange rate of 5.5 reals per dollar. The average spot price for corn in the state during June was R$ 35.99 per sack or approximately $2.97 per bushel. Given those parameters, a farmer would need to produce 127.5 sacks per hectare or 121.6 bu/ac to cover his operational costs.

Imea estimated that a farmer would need to produce 142.4 sacks per hectare or 135.8 bu/ac to cover the total operational costs including depreciation, taxes, etc.

It is uncertain what the corn yield will be in 2024/25, but the corn yield in Mato Grosso for the last three years averaged 110.8 sacks per hectare or 105.7 bu/ac. At the current spot price of corn in the state, if a farmer only produced the average yield for the last three years, they would probably be hard pressed to cover their costs.

When Brazilian farmers faced a similar situation in 2023/24, they reduced their safrinha corn acreage across Brazil, not just in Mato Grosso. If corn prices do not improve significantly between now and December when safrinha corn planting starts, Brazilian farmers may once again reduce their safrinha corn acreage.

Tags: Mato Grosso, yield, acreage, safrinha corn, cost, estimates, corn, Production