​Storage deficit threatens Brazilian grain super harvest

The Brazilian grain harvest has been recording recurring records, a mark that has not been accompanied by the capacity to store these products. For the 234,3 million tons of grains for the 2016/17 harvest forecast by the National Supply Company (Conab), there is capacity to store only 158 million, a deficit of 77 million, which remain in the open or have to leave directly from the crops to their destination locations.

“The scenes we have seen across the country, especially in the Central-West region and Mapitoba, are heartbreaking: thousands of grains in the open, being lost. These are investments in technology, inputs and labor thrown away”, laments Andrea Hollmann, Executive Storage Manager at CASP, one of the main Brazilian manufacturers of machinery and equipment for poultry farming, pig farming and grain storage. “This situation goes against one of the guidelines of the FAO – Food and Agriculture Organization of the United Nations for food security, which recommends the country have a storage capacity 20% greater than the harvest”, adds the executive, mentioning the USA, where static capacity Americans' storage capacity exceeds the country's grain production.

The recent announcement of the Agricultural and Livestock Plan 2017/2-18 with specific incentives for storage has improved market sentiment. The interest on the Warehouse Construction and Expansion Program (PCA) was reduced from 8,5% pa to 6,5% pa, the resources will have a credit amortization period of up to 15 years and 100% financing of the project, in addition to the inclusion of cereal growers with a line of R$300 million.

“We are optimistic, as the difficulty in accessing credit ends up being one of the main obstacles to investment in storage. Furthermore, having silos is also an important commercial strategy, allowing the producer to take advantage of better sales prices, even more so with excess supply, as is the current scenario”, analyzes Andrea, betting on a resumption of investments.

To serve this market, CASP has equipment that operates in the reception, cleaning, drying, storage and dispatch of grains.