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Agriculture

South America's Corn Acreage: Stable in Brazil, Steep Drop in Argentina

2024-11-21

Corn production in South America's two major agricultural countries, Brazil and Argentina, is set to follow distinct trajectories during the 2024–2025 crop season. Brazil is expected to increase production while cutting exports, while Argentina is projected to see a significant drop in corn acreage due to disease concerns. This article delves into the latest forecasts and examines the factors influencing these trends.

Uncover the Future of South American Corn Production

Brazil: Steady Acreage, Changing Exports

The Brazilian food agency, Conab, has raised its estimate for the 2024–2025 corn crop to 4,717 million bushels, a 3.6% increase from last year. Corn acreage for Brazil's first, second, and third crops is expected to remain stable at 52 million acres. Field activities for the first corn crop are underway, with 52% of the area already planted by November 17, ahead of the same period last year. This season, farmers are allocating 9.3 million acres to the first crop, with production projected at nearly 897 million bushels, a slight decrease.The second corn crop acreage is expected to stay at 41 million acres, with production projected to reach 3,725 million bushels, a 5% increase over the previous harvest. However, Brazil has significantly reduced its corn exports in 2024. Between January and October, exports were 27% lower than last year, and the National Association of Cereal Exporters projects total exports of approximately 1,614 million bushels for 2024. The recovery of supply in other major producing countries and the decline in Chinese demand have contributed to this slowdown.

Argentina: Disease-Driven Acreage Drop

Argentina's corn planted area is projected to decrease by 25% in the 2024–2025 crop season, equivalent to 6 million acres. The primary factor behind this decline is the devastating impact of corn stunt disease during the previous season. Many farmers lost their entire corn crop due to the bacterium spread by the leafhopper pest. This has made farmers cautious this season, and the loss in corn area will be covered by soybeans, which require lower investment.Argentinian farmers began planting their 2024–2025 first corn crop in September, facing concerns over dry conditions due to the La Niña phenomenon. However, recent rains have allowed them to make progress. By November 14, 39% of the expected crop had been planted, six percentage points ahead of last year. Argentina's corn exports for the 2024–2025 marketing year are projected to reach 1,417 million bushels, a 9% increase compared to the previous year, marking the highest export total since 2020–2021.

Final Considerations

Recent rainfall has improved growing conditions across South America, but the onset of La Niña introduces uncertainty. In Brazil, total corn acreage is expected to remain stable, with production projected to increase. In Argentina, corn acreage is forecasted to drop due to disease challenges. Despite this, Argentina is reasserting its position in the global corn market and may overtake Brazil as the world's second-largest exporter in the current marketing year.Corn Acreage in South America: Stable in Brazil, Sharp Decline in Argentina was originally published by Farmdoc.

Discover the fascinating story of a 176-acre century farm sold at auction in Waterloo, Illinois. This unique property holds significant value and offers diverse opportunities for buyers. Let's delve into the details and explore the economic implications.

Uncover the Hidden Gems of Waterloo's Farm Auction

Sellers - A Family Legacy

In Waterloo, a 176-acre century farm changed hands at an auction on Oct. 29. The property was owned by sixteen family members, seven of whom were part of a trust under LaVerne Proctor. She passed away in December 2022, leaving behind this agricultural heritage. The remaining family members decided it was time to sell, marking the end of an era.

The trust and the family's connection to the land showcase the significance of this century farm. It represents not just acres of fertile soil but also the memories and stories of generations.

Buyers - Diverse Plans

The four buyers who acquired the land have distinct plans. Tract 1 buyer aims to build a home on the mostly tillable land with a scenic pond. Sold at $20,000 per acre for a total of $210,000, this tract holds the promise of a new residential development.

Tracts 2 and 3 were purchased by a private Christian school with plans to construct a new building. At $25,581 per acre for a total of about $550,000, this section of the property will serve a different purpose, adding educational value to the area.

Tracts 4 and 5 will continue to be farmed, with a buyer planning to maintain the agricultural operations. Sold at $21,121 per acre for a total of about $1.225 million, these acres will contribute to the local agricultural economy.

Tract 6 was purchased using a USDA Farm Service Agency (FSA) loan by a beginning farmer. Sold at $13,914 per acre for a total of about $1.198 million, this tract will be a new chapter in farming for the buyer.

Economic Analysis - Steady Trends

The sale of this property at about $3.18 million, averaging $18,075 per acre, is significantly higher than the 2024 state-wide average of $8,700 per acre. This indicates the unique value of this particular farm in Waterloo.

Brad and Brenda Chandler predicted the sale price within a few hundred dollars, showing their expertise in the market. Their recent sales in the same area confirm their hunch that farmland sales in the area are holding steady.

The Federal Reserve Bank of Chicago's November 2024 AgLetter also supports this trend. The seventh district, which includes Illinois, Iowa, Indiana, Michigan, and Wisconsin, had no year-over-year change in agricultural land values in the third quarter of 2024. This is the first period without an increase since the fourth quarter of 2019.

Data from the University of Illinois Farm Business Farm Management (FBFM) shows that 2024's average of $8,700 per acre is a 3.3% increase over 2023's average of $8,420. However, the increase has slowed compared to previous years due to factors such as rising interest rates and lower commodity prices.

Brad Zwilling, who compiled the data, explains that farmers' strong financial positions and record high incomes in 2021 and 2022 have supported land purchases. But with higher interest rates and lower returns, the trend is starting to slow.

About the Property - A Rural Gem

The land is located on the edge of Waterloo in Monroe County, directly east of the Waterloo Country Club. The county's plans to redirect a road along the farm's border will transform it into a dead-end public road, adding to the property's uniqueness.

The property is a mix of fertile, tillable cropland, picturesque views, and an older home. With taxes of $4,819.62 in 2023, it offers a balance of agricultural productivity and rural charm.

Each tract has its own characteristics. Tract 1 is mostly tillable with a scenic pond and an approved entry point. Tracts 2 and 3 are also tillable, while Tract 3 includes a farmstead and historic home. Tracts 4 and 5 have road frontage and established access. Tract 6 is mostly tillable with city limits on one side and a redirected road.

All acreage amounts are considered "more or less," adding to the charm and flexibility of this diverse property.

Produced in partnership with American Farmland Owner (AFO). AFO aims to help landowners make informed decisions for their farmland while ensuring the prosperity of American agriculture.

Mississippi Sen. Cindy Hyde-Smith and Arkansas Sen. John Boozman have raised serious concerns about the plight of farmers. With a sharp decline in farm income this year, they fear that one in five farmers could be pushed out of business. At a Senate hearing on disaster aid, they emphasized the need for significant government help.

Dire Situation in Farm Country

Boozman highlighted the dire situation in farm country, especially for crop producers. Despite stronger livestock prices than expected, the combination of high production costs and lower commodity prices is taking a toll. Federal intervention is seen as crucial as bankers are reluctant to loan money for 2025 crops. 1: The USDA has forecast a 25% plunge in net farm income this year, but it still remains the fourth highest on record at $116 billion and 15% above the 10-year average. However, for individual producers, the situation is different. Hyde-Smith pointed out that with high costs and interest rates, 20% of good producers are expected to lose out. This is truly an emergency and a crisis for farmers. 2: As Congress makes hard choices about disaster funding and other economic assistance, it is essential to identify which farmers are struggling. USDA deputy secretary Xochitl Torres Small has spoken to farmers and understands their input cost-related challenges.

Senator Boozman's Perspective

Boozman, who is set to become Senate Agriculture Committee chair, emphasized that even with higher-than-average farm income in the past, the current situation with high interest rates and costs is dire. He questioned how rural America can endure this without significant help. 1: The Kansas City Federal Reserve reported a more than 40% growth in the volume of new operating loans during the summer compared to the third quarter of 2023. But weak profit margins in the crop sector continue to weigh on the farm economy, while the cattle industry shows strength. Farm operating debt has grown rapidly alongside lower crop prices and high production costs, and lending activity for other types of loans has softened. 2: Interest rates on farm loans averaged slightly more than 8% during the third quarter before the Federal Reserve's rate cuts. Bankers in the central Plains reported a slight increase in the rate of problem loans during the same period, with about 6% of loan portfolios on the "watch list." In the Midwest, agricultural credit conditions weakened, with 42% of responding bankers predicting a lower volume of farm loan repayments over the next three to six months. Forced sales or liquidations of farm assets by financially distressed farmers are expected to rise.