How will input prices affect South American crop production?
While US farmers debate 2022 crop management plans amid record high input prices, South American farmers are making those decisions now which could impact their crop yields.
Kevin McNew, Chief Economist for the Farmers Business Network says with chemicals like glyphosate jumping from $14 to $50 per gallon in the past year, many South American farmers are minimizing crop inputs.
“Brazilian farmers are more likely to spend on their soy crop and less likely to spend on that second season safrinha corn crop, so when you ask me about yield drag or yield risk, I think it probably plays out more on the second season safrinha corn crop.”
McNew says even if Brazil ends with a smaller corn crop, he expects a large acreage shift to soybeans in the US next year, similar to what happened in 2008.
“In that year we lost 7 million acres of corn and we gained over 10 million acres of beans plus some other crops shifted around as well, so we had big changes that US farmers made in response to input prices.”
Contrary to last season, South American crops are off to a great start, but McNew says La Nina is still a wild card there.
“It’s the early innings of a nine-inning ball game and the first two innings look pretty good for them.”
But he reminds farmers La Nina isn’t a guarantee for South American crop problems. McNew made his remarks during a webinar this week hosted by the US Soybean Export Council.