Harvest 2023-2024: find out what are the decisive factors for planting corn in Santa Catarina

Corn is a cereal that has a profound impact on the reality of agribusiness in Santa Catarina. The insufficiency of corn for the animal protein production chain and the high cost of transporting this grain, especially from the Center West, for the State's internal supply are of concern to the agricultural sector. Santa Catarina needs to import more than 5 million tons, mainly for feeding poultry, pigs and dairy cattle.

According to data available at the Observatório Agro Catarinense, the area destined for the cultivation of grain corn was reduced by around 150 thousand hectares between the 2012-13 and 2022-23 harvests. The strong fluctuation in prices, in addition to management factors and production costs, stimulated the conversion of corn planting areas into soybean areas in the State, a product with great liquidity in the international commodities market.

The soybean/corn price ratio is a determining component in the decision on the next planting. In 2022, approximately two bags of corn would be needed to purchase one bag of soybeans (2:1 ratio), a situation favorable to corn. In July 2023, this ratio exceeded 2,3 sacks of corn for one sack of soybeans (ratio 2,3:1), which favors the oilseed.

An additional factor that is being considered by producers is the occurrence of “leafhopper” and associated diseases in corn crops, which affected production in previous harvests. Due to these factors, the producer is reluctant to maintain the same cereal production area for the next harvest. The initial estimate for the 2023-2024 summer harvest was prepared by Epagri and released on September 14th.

In the last three years, the area cultivated with grain corn has stabilized at around 320 thousand hectares. Weather problems in the last two harvests reduced production in the State. In 2023 there was a recovery in production to 2,7 million tons. However, prices have seen a strong reduction since the beginning of the year, exceeding 30%, due to the record harvest in Brazil and the foreign market.

However, despite prices being low at the moment, there are favorable medium-term factors in the corn market:

– Significant increase in cereal consumption in Brazil for ethanol production;

– Rising exports: Brazil is expected to become the world’s largest exporter of the product in 2023;

– The war between Russia and Ukraine has caused turbulence in the international market;

– The United States harvest has not yet been defined, weather conditions should guide the market in the second half of the year.

These are just some of the main factors affecting the corn market right now. The market is complex and dynamic and is affected by a series of issues that may vary over time.

2023-2024 Harvest

The expectation, in the South region, is that the corn area will “shrink” between 10% and 20% in larger areas. On small properties, the numbers must remain the same. In Santa Catarina, initial harvest data points to a retraction of 4,1%, which could increase in the next updates. The factors that influence this: higher cost of corn farming compared to soybeans and current soybean/corn prices, favorable to soybeans. Furthermore, the incidence of leafhoppers and their control concern producers. However, production is expected to fall slightly, due to the expectation of increased productivity.