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Brazil's Next Agriculture Expansion

May 11, 2010
(Editor's note: this is the first of four stories on the recent Top Producer Frontier Study Tour this week. The stories will appear on AgDay each morning and will be posted here each afternoon through Friday. For more on the Frontier Study Tour that included visits to Panama and throughout Brazil, click here.)

Expansion of Brazil's agricultural might has been well documented since the vast settlement of the country's center opened in the 1970s and 80s. States like Mato Grosso du Sol and the giant state of Mato Grosso, which today produces 8% of the world's soybean crop, became common in agricultural circles. In the 90s states like Bahia continued that expansion and welcomed many U.S. farmers and today the trend continues northward into the state of Maranahoa and Toncontins.
 
With just 9.735 million hectares of soybean production in 1990, the country has seen unprecedented growth. By the end of next year, soybean production alone should reach 23.5 million hectares throughout the country.
 
That rapid sprawl has brought much focus to the country from agricultural competitors around the world, but also from environmentalists who are concerned that much of the world's rainforests are being neglected in favor of farm fields.
 
Marcelo Montiero, the executive director of Aprosoja, which is the Mato Grosso soybean growers association, says there is a major misunderstanding about Brazil's production growth.
 
"The thing is, they've tried to grow in the Amazon Forest. It rains a lot. You start harvesting and it's too rainy and you lose a lot of production. It's very risky to grow soybeans in the Amazon forest,” Montiero says.
 
Production facts aside, the Brazilian government has also taken action to limit expansion. Land owners in the plains areas are now required to keep 20 percent of their land holdings in a natural state. In the rain forest areas 80 percent of the land must be idled.
 
This is limiting Brazilian expansion…but it's certainly not stopping it. The cerrado areas, which are much like the U.S. plains states are far from tapped out. One U.S. farmer, now farming in the western-Brazilian state of Bahia still sees opportunity for expansion.
 
"You hear these numbers of 250 million acres in Brazil,” says John Carroll, a native of Illinois. "I do not believe it's there. In northern Mato Grosso, you're already getting into the rain forest area and there's the zero clearing policy. There is obviously more land being done here than in the U.S. or probably any country in the world, but it's not close to these numbers that I hear.”
 
So, if expansion is on the horizon, where will it happen? Montiero believes a lot of that will depend on infrastructure development.
 
"In Mato Grosso, our total row crops areas is about 6-7 million hectares every year. The total pasture area is 25 million, so let's say we can convert one-third of that, we could double the total production area. But that's going to take a lot of investment, because we need lime, we need fertilizer. We need the infrastructure to bring this land into production.”  
 
As the transportation issues are addressed, that will allow inputs to move into production areas and the subsequently the crop to move out. As feedlots are developed across the country, particularly in Mato Grosso, that will make pasture ground more readily available for conversion to crop production.

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