The rain has made a mess of things this year. The El Niño phenomenon parked a massive cold front over Brazil, sucking in moist air from both the Atlantic and Pacific. The result has been too much rain.

The soybeans themselves look good, laden with pods. But some farmers in Mato Grosso (the soybean expansion area) are harvesting at moisture levels of 24%, having to dry the beans down in wood-fired dryers to at least 12%. That's when they can manage to get into the fields. Harvest is up to three weeks late in some areas due to rain.

Farmland is cheap in Mato Grosso — one classified ad in the Diário de Cuiabá, a daily newspaper, offered 99,000 hectares at R$100/hectare (about 240,000 acres at $29/acre). And often farmers can buy land there with 25% down and 25% annually for three years. Prices vary according to distance from roads, suitability for planting and whether the land is still scrub brush or has been cleared and planted.

The soil is phosphate-poor, high-acid and short on micronutrients like boron. But with plenty of management and inputs, it can produce more than the U.S. national average soybean production. “It's a little like hydroponics,” said a visiting Iowa farmer, looking out over Mato Grosso fields. “You get out what you put in.”

In fact, says one Brazilian market analyst, “Farmers here don't buy the land — they buy rainfall.”

In a non-El Niño year, Mato Grosso farmers can just about set their watches by the rainfall. If they plant early beans, there's usually time to follow the combines with planters, dropping corn seed before the rains cease altogether for winter in late March or April. And if Mother Nature doesn't play ball, producers may apply paraquat to speed things along.

Developing Rust Resistance

Gilberto Goellner, former head of the Mato Grosso Foundation, a research entity set up by state producers, says seed research is focused on jamming wanted traits into early varieties. The foundation's work is funded by royalties on seed sales. “Producers want cyst resistance and stem canker resistance put into earlier varieties,” he says.

This year, Asian rust resistance is at the top of the list of traits seed producers and the foundation are working on. The problem first appeared in Brazil last year, and has been spreading north.

Although it hasn't reached Mato Grosso yet, Asian rust has worked its way for the first time into soybean fields in the next state south, Mato Grosso do Sul. Goellner says the foundation will put a rust-resistant variety on the market by next planting season. And the executive director of a major Mato Grosso seed company says his new rust-resistant variety, called Inox (stainless steel) will also be ready by then.

“We got some (soybean) varieties from Africa that showed resistance,” he says. With warm weather, Brazilian breeders can get three generations of crosses made per year, which speeds up breeding programs.

That usually dependable weather and aggressive research operation make Mato Grosso an attractive and low-cost place for soybean (and, increasingly, cotton) producers.

Aside from a shortage of capital, the big challenge continues to be the appalling road conditions. Farmers say the new soybean railroad and the Madeira waterway (open about half the year) are full. And it's a 40-hour truck trip to the port at Paranaguá.

But don't count Brazilian farmers out. Overcoming the logistical hurdles to get the crop to market won't be easy. But then, 25 years ago, plenty of people said Mato Grosso wouldn't make it at all as a soybean producer. The Brazilians have the will, and are likely to find a way.