Soybean Production Cost in Mato Grosso

27 May 10

I have received updated 2011 soybean cost of production data for Mato Grosso.

 

Costs have come down the last two months.

 

Cash variable costs seem to be about R$1,000 per hectare or US$ 550.

 

This is about US$ 225 per acre.

 

We still need to add in some freight, taxes, land and depreciation costs.

 

The breakeven price in Reais is about R$28 to 29 per sac.

 

As we can see by current prices below, this is breakeven at best.

The costs have come back to historic norms.

9 dollar Chicago beans means breakeven in Mato Grosso.

My concern is a big bean crop in USA and 8 dollar beans in Chicago.

 

Unless US$ rallies this fall, it will be impossible to lock in a profit in remote areas of Brazil.

Soybean prices per 60 kilos (2.2 bushels) as of May 24
Dollar = 1.80:1
I will comment more in next newsletter.