11/1/2004 EFE NEWS SERVICE - Brazil's soybean growers will suffer lossesof at least $1.5 billion in 2005 thanks to high production costs andfalling prices on the world market, the Agriculture and LivestockFederation forecast in a report released Thursday.

Over the past three years, Brazil's soy industry has become one of theglobe's top three producers and exporters by expanding cultivation.

However, Brazilian producers are now facing "an extreme discrepancybetween the cost of the most recent harvest and expected sale price in thecoming year," the federation said in a communique.

"According to projections, prices will not cover the cost of production,"which will in turn lead to greater indebtedness and shrink the next(2005-2006) harvest," the communique said.

Growing 21.2 million hectares (52.3 million acres) of soy will cost 33billion reais (about $11 billion), the group said.

Based on an average productivity of 43.2 sacks per hectare and averageprice on Oct. 26, the harvest will generate 28.84 billion reais (about$9.3 billion), according to federation estimates.

"The final result will be a loss of 4.35 billion reais" (roughly $1.5billion), based on the difference between cultivation costs and marketprice.

The situation could worsen if prices continue to fall as a result of thisyear's bumper U.S. crop, it said.