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Production
Estimates and Crop Assessment Division |
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Production
Estimates and Crop Assessment Division |
International
soybean prices rallied strongly during the pre-planting months in Brazil.
Chicago Board of Trade nearby futures rose from roughly US$5.20 per bushel in late July
to US$7.90 in early November (or 52 percent). This increase was
attributed primarily to the deteriorating U.S. soybean crop and strong international
demand from China. Soybean prices quoted in key
Brazilian locations across the
country responded in kind, with prices in the Center-West jumping from roughly
R$29.87 per 60 kilogram bag in July to R$45.50
in early November (or 52 percent). These favorable prices are
expected to fuel a substantial expansion of acreage, as Brazilian producers are
poised to reap especially strong profits. On a national basis farmers have
reportedly forward sold 30 percent of the 2003/04 crop, while growers in the
Center-West have committed upwards of 53 percent of their expected harvest. In
addition to the run-up in soybean prices, Brazil’s domestic market has ample
carryover stocks of corn from the record 2002/03 harvest. Corn is the primary
competitor crop for soybeans in the main summer growing season, and often
competes for available acreage. Corn carryover stocks in January 2004 are
forecast by Brazil’s Ministry of Agriculture (CONAB) to be a comfortable 4.2
million tons, up from 2.5 million last year. The current price ratio of soybeans
to corn heavily favors soy, being 2.5:1 in Mato Grosso and averaging 2.0:1 in
other major producing states. As such, a wide array of crop forecasters estimate that
summer (main season) corn area will decline between 0.7 and 1.3 million hectares
this year, while soybean area will rise 2.0 to 2.6 million.
The 2003/04 soybean planting season began in October, and is progressing rapidly. As of mid-November, an estimated 35-40 percent of the crop was sown, well-ahead of the average for this time of year. Strong growth in soybean area is expected in virtually every producing state, with the greatest advances being forecast for the Center-West region. Over the last 5 years, the Center-West states of Mato Grosso, Goias, and Mato Grosso do Sul have spearheaded a remarkable expansion in cultivated soybean acreage, contributing 3.3 million hectares or 60 percent of the total increase in national area. When this region is coupled with the newly emerging production zones in Bahia, Maranhao, and Minas Gerais, they account for nearly 75 percent of the recent growth in national soybean acreage (or 4.0 out of a total of 5.5 million hectares since 1998/99). The soybean agribusiness and farming economy is booming in these relatively remote areas, and it is expected to continue to grow given this year’s favorable soybean price environment. Farmers have every reason to reallocate some of their potential grain acreage (primarily corn) to soybeans, as well as to continue their medium-term expansion plans by converting available pasture and savannah lands to farmland. Double-digit growth is expected in 2003/04 soybean area in the vast majority of soybean producing states.
Asian soybean rust (Phakospora pachyrhizi) has rapidly spread in the past two years to virtually all the primary producing areas in Brazil and the severity of reported crop losses has had a sobering effect on soybean producers and researchers. In a review of available research there was no indication that rust in soybeans poses any risk to consumers. Rust affects the leaf canopy, not the seed. The rust pathogen is now firmly entrenched in South America, having been reported in Argentina, Paraguay, Bolivia, and Brazil, and will represent an enduring crop management problem for soybean producers in the region. Brazilian farmers have been advised by the research and crop extension communities to spray their crops with preventative doses of fungicide in advance of any observed symptoms of infection. Farm chemical dealers have responded by acquiring ample supplies of recommended fungicides, and many soybean growers reportedly stocked up on the chemicals in advance of the planting season. What remains to be seen, however, is how effectively Brazilian soybean farmers can manage this disease given the enormous size of their soybean growing region, regional shortages of commercial rust-resistant soybean varieties, the speed of the organism’s growth cycle in the crop canopy, its ease of dispersion, and the prevalence of showers and heavy rains during the growing season that can stymie fungicide spraying operations. Given the current wide distribution of the disease in Brazil, national soybean production prospects in 2003/04 party hinge on the relative success that farmers have in limiting the yield-decimating effects of Asian rust.
Asian soybean rust was
first reported in South America in 2001
in Paraguay. Subsequently it was discovered in farm fields in southern Brazil
in 2002. Scientists also report that the rust pathogen was found in
limited areas of northern
Argentina in 2002, and is being widely reported in large portions of the 2003
Bolivian soybean crop. Apparently, the Asian soybean rust pathogen is firmly
entrenched in South America, and will represent an enduring crop management
problem for soybean producers in the region.
Asian soybean rust has been described by plant pathologists as an aggressive pathogen that develops rapidly in the crop canopy and spreads its spores easily over great distances via winds. Researchers have described clouds of spores being released when infected plants are disturbed by wind or individuals walking through rust-infected fields. Asian rust has been characterized as the most destructive foliar (leaf) disease of soybean, and can commonly reduce soybean yields by a factor of 10-80 percent if not treated effectively with fungicides. The pathogen adheres to and primarily attacks the leaves, absorbing nutrients that would ordinarily go into soybean seed production. As it preys on the crop foliage, it shortens the life of the plant and causes premature maturation and defoliation. Fields infested with a high level of rust show a distinct yellowing and browning of the foliage. Commonly, untreated soybean plants are severely defoliated several weeks before their normal harvest period, and produce significantly fewer soybean pods. The resulting soybean seed that is harvested from a severely infected field often has lower seed weight and lower overall quality. The infection process typically starts on the lower leaves of the plant, and increases rapidly after pod set when the full crop canopy has developed. Within a period of 10-21 days after a plant has been infected with Asian soybean rust, spores are released. Brazilian researchers, therefore, have stated that farmers have an extremely short window of opportunity to battle the pathogen once it enters their fields, and must spray the crop with an effective fungicide within 10 days of an outbreak to prevent substantial yield losses. Given the difficulty of monitoring crops across vast acreages in Brazil, farmers have been advised to spray their soybean crops in advance of any signs of infection and to consider the applications as a normal crop management procedure.
As the 2003/04 soybean growing season progresses in Brazil, a great deal of attention is being paid to this fungal pest in an attempt to limit its ability to adversely harm the nation’s soybean production capacity. The rainy, warm and humid climatic conditions prevalent in Brazil favors growth and spread of Asian soybean rust, and to its ability to achieve severe infestation levels. Prolonged leaf wetness (at least 6 hours) combined with temperatures between 59-86 degrees F (15-30 degrees C) and humidity of 75-80 percent is required for spores of Asian rust to germinate and actively infect plant tissue. These kinds of conditions are common throughout the Brazilian soybean region, especially through the middle part of the growing season when the crops approach reproduction and pod formation. More importantly, the rust pathogen is versatile in its ability to infect and thrive on a variety of native (wild) and cultivated leguminous plant species in Brazil (both crop and forage species) in addition to soybeans, and has ample hosts throughout the year to maintain its survival in the natural environment. One of these native species that provides Asian rust with year-round shelter is called Kudzu (Pueraria lobata), and grows in both Brazil and Paraguay. This plant species apparently is highly tolerant of Asian rust, and can maintain good plant vigor despite severe levels of rust infection. Native leguminous plants like kudzu serve as permanent reservoirs of infectious rust inoculum, which is then available for dispersion to the annual soybean crop.
By all accounts, Brazil is expected to significantly increase the acreage cultivated with soybeans this year and produce a record harvest of 60.0 million tons. At the current rate of expansion of the soybean crop, Brazil has the ability to match or exceed U.S. soybean production by 2005. Therefore, it is easy to understand the enormous financial and economic stake Brazil has in adequately protecting their valuable soybean crop (worth US$11.5 billion in 2003) from this new and virulent fungal disease. On the positive side, it is important to note that Brazilian scientists have made progress in testing soybean varieties for rust-tolerance or resistance, and have isolated at least one resistant variety (BR-134). In addition, private-sector seed breeding foundations and companies such as Monsanto are working closely with the Brazilian government, and investing substantial research resources toward identification of rust-resistant soybean cultivars. In an interview with USDA staff,Dr. Jose T. Yorinori, Brazil’s leading soybean rust expert at the national agricultural research institute EMBRAPA, reported that farmers across Brazil had anticipated a rust epidemic in 2002/03 and acted responsibly to defend their crops. He estimated that 80 percent of Brazil’s soybean acreage received at least 2 fungicidal sprays last year, covering roughly 14.8 million hectares. On average, these additional chemical applications added an estimated US$40-50 per hectare to their crop production costs.
The rapid spread of Asian soybean rust follows a pattern experienced in Asia and Africa. It was discovered in the nation’s southern producing states in 2001/02, and by harvest that year the Ministry of Agriculture, Livestock, and Food Supply (MAPA) estimated it had spread to 14 percent of the national crop area or 2.325 million hectares. One year later in 2002/03 it is estimated by USDA Agricultural Research Service scientists and their Brazilian counterparts at EMBRAPA to have spread to roughly 80-90 percent of Brazil’s soybean producing area. Brazil is adequately marshalling its resources and research capacity to fight Asian soybean rust. Producers face a disease that is well established in the native environment throughout most of the soybean-growing region, and is not going to go away. Officials in Brazil report that there are more than adequate supplies of fungicide in Brazil to manage rust this season, and there is no reported shortage of spraying equipment (aircraft or machinery).
On a more sobering point, Dr. Yorinori reported that the type of rust that infected crops last year in key Center-West states of Mato Grosso, Goias, Bahia, and Minas Gerais was a new and unusually virulent strain. It reportedly decimated all previously identified rust-resistant cultivars that had been adapted to this region. This discovery was shared with international rust researchers at the American Phytopathological Society (APS) annual meeting in Charlotte, North Carolina in 2003, in a paper authored by Dr. Yorinori and other prominent USDA soybean rust experts in the Agricultural Research Service. In addition to this concern, soybean seed multipliers who grew the crop on irrigated lands in the Center-West this winter, to provide ample planting seed to growers in 2003/04, reported high levels of rust infection in their crops. These seed crops, however, were adequately sprayed and reportedly produced normal yields. This is good news and demonstrates the fungicide's potential effectiveness to protect crop yields. Brazilian scientists and extension agencies are advising growers of appropriate control measures, such as early season detection and spraying. Given the current wide distribution of the fungal disease, achieving record national soybean production in 2003/04 depends not only on favorable weather, but also on the relative success that farmers have in limiting the yield-decimating effects of Asian rust. And this success will largely be determined by the effectiveness of their fungicide application program.
