Historic flooding in southern Brazil has left at least 100 dead and displaced 160,000, while also devastating crops and impacting port operations and fertilizer distribution. The floods will have long-lasting impacts for agriculture, with saturated soil making it harder for farmers to plant crops such as rice and wheat for next season, according to a Bloomberg report.
Growers in Rio Grande do Sul will likely be forced to shift away from their traditional crops and into new cultures, according to Silvia Massruhá, Head of Agricultural Research agency Embrapa. Wheat output, already forecast to drop 4.3% in the state in the season that was supposed to start this month, could be even lower after the floods.
The historic weather has already hurt this season’s soybean harvest and paralyzed plants that process the crop into cooking oil and animal feed. Some meat factories have also halted operations in the state, which is among the biggest growers of soybeans, wheat, and rice, as well as a large producer of pork and poultry.
“There will be a need for rearranging agriculture and feedstock activities in that region,” Massruhá said in an interview this week. “The soil has soaked up a lot of water, so we don’t know what share of rice or wheat farmers will be able to plant [for] the next crop, or if they will need to plant something else before the soil recovers.”
About 1 million mt of soybeans may have been lost in Rio Grande do Sul, the USDA said in a May 10 report. Brokerage StoneX Group Inc. said the impact could be three times bigger.
Carlos Cogo, an independent agricultural adviser, said tractor and truck losses will also prevent farmers from planting wheat as previously planned. That would mean an even bigger loss than the 4.3% decline – to almost 4.2 million mt – that supply agency Conab predicted on May 14 for the 2024/25 season.
Embrapa plans to send researchers to the affected areas to run soil analysis and diagnose the crop situation when water levels drop.
In the meantime, Bunge Global SA has suspended operations at its Rio Grande soybean-crushing plant and halted operations at a terminal at Rio Grande port. Cargill Inc. resumed soybean crushing at its Cachoeira do Sul facility after two days of interruptions. Some activities such as biodiesel production remain halted as flood-blocked roads constrain shipments.
Soybean processor Bianchini SA’s facility in Canoas has been flooded, putting at risk almost 100,000 mt of oilseed in storage. The company also suspended production at the plant. Additionally, at least two chicken and pork facilities remain suspended, with others facing partial interruptions, industry group ABPA said.
On May 6, Brazil President Luiz Inacio Lula da Silva signed a decree to exempt emergency relief from 2024 fiscal rules, paving the way for his economic team – led by Finance Minister Fernando Haddad and Planning Minister Simone Tebet – to develop specific aid measures.
The government is currently planning to extend cheap credit, tax relief, and financial aid to help rebuild homes and businesses, Tebet told Bloomberg News on May 7. It is also finalizing a proposal to provide debt relief to the state of Rio Grande do Sul to assist its road and infrastructure reconstruction needs.