Brazilian Farmers Brace for Lower Soybean Prices

by 5m Editor
21 February 2005, at 12:00am

BRAZIL — Around the clock an endless caravan of trucks carrying soybeans rumbles along the BR364 motorway in the western Mato Grosso state on its way to Brazil's Atlantic ports, about 900 miles to the southeast. Another bumper soy crop is being harvested. But despite the record production, farmers in Mato Grosso, Brazil's biggest soybean producer, are bracing for their worst financial crisis since they began cultivating this barren region in the mid-1980s. The collapse of international soybean prices and a big rise in production costs caught Mato Grosso's highly indebted farmers off guard, plunging many into deep losses after years of big profits. As a result, two decades of gold rush-style expansion along this agricultural frontier are coming to an end. "Brazil's agribusiness is in flux. We are victims of a crisis of abundance," Otaviano Pivetta, rural development secretary in Mato Grosso, told hundreds of protesting farmers in Cuiaba, the state capital, this month. This year farmers are expected to lose more than half a billion dollars on their harvest, according to the state agriculture federation, known as Famato. Short of cash, farmers are likely to plant less in September, further dimming prospects for soybean and soy product exports, which totaled $10 billion in 2004. Source: Los Angeles Times

5m Editor