Record Harvest Projected
The Brazilian Institute of Geography & Statistics [locally IBGE] projects a growth exceeding 10% in the production of grains and oil-bearing seeds in the 2007/2008 harvest, compared to the previous season. The government agency issues monthly projections for all major crops.
The optimistic forecast comes on the trail of good weather conditions for major winter harvest crops, specially in the top production state of Mato Grosso.
An IBGE spokesperson affirmed the institute sees additional factors benefiting producers: The upward trend in both local and export market prices for major crops, and the world's demand for cleaner energy sources, which leads to an increased demand for products such as soybeans, sunflower seeds and Barbados nut (Jatropha Curcas).
As IBGE sees it, US heavy use of corn as the basic feedstock for ethanol production is an added factor leading to higher grain prices as a whole. American farmers will have to increase corn production to meet local demand, thus reducing the respective soybean-planted area, as well as corn exports.
IBGE's June 2007 projections included 58.2 million tons of soybeans, and 51.7 million tons of corn (15.5 million of which from the winter harvest).
Increased grain production comes in spite of an ethanol boom that has led many bean and corn producers to move to sugarcane. And this boom will continue, as Brazil is expected to produce 513.1 million tons of sugarcane, 12.7% over the 2006 output.

Two Steps Back, One Forward
After two years in a row of severe crises in prices and losses due to inclement weather, Brazilian agricultural production is back on the growth path. According to studies conducted by the National Agricultural Confederation (CNA) in cooperation with the University of Sao Paulo, Brazil has had a 1.3-% rise in its Ag-GIP (agricultural gross internal product) between January and April of 2007. But input costs have also risen at an estimated 2.3% during the same period.

Ag Credit On The Rise
From Agencia Estado, Sao Paulo
Total amount of credit lines extended to farmers in the 2006/07 harvest reached 44.6 billion reals, a jump of 5% in relation to the previous season's numbers. The Ministry Agriculture is projecting another increase for the upcoming harvest that begins in September: 58 billion reals. Calculated at the July/07 average exchange rate the latter amount is equivalent to approximately US$ 30 billion.