As I spent time visiting with farmers from across North America at Top Producer Summit in Nashville, Tenn., it was clear there is one issue top of mind: South American production.
“When we were on the ground in January, our pod counts were record large,” says Dan Basse, president of AgResource Company.
Just as harvest began ramping up, his company completed a crop tour of Brazil’s largest production area, Mato Grosso. He says everyone is going to have to raise their estimates for soybean production in 2023.
“When we look at the total Brazilian soybean crop, it’s 154 million metric tons as of today and last year was around 129,” Basse says. “So, this is significantly larger.”
BIG BEAN YIELDS
Maybe even more impressive is the yield average estimates from Mato Grosso. AgResource is forecasting the country’s largest producing state will see 60.3 bu. per acre. In 2022, Iowa averaged 58.5 bu. per acre, and Mato Grosso is larger than the three “I” states combined.
While La Niña-driven dryness hurt crops in southern Brazil and Argentina, the large production area in Mato Grosso will help make up the shortfall. In late January, the Buenos Aires Grain Exchange rated Argentina soybeans at just 7% good-to-excellent.
“Right now, we’re on a trend of lower U.S. grain exports because of a record crop in Brazil and its big export potential,” says Steve Freed, vice president of grain research for ADM Investor Services.
Basse agrees: “Brazil will be an exporter of size and substance all the way through next October.”
LOWER DEMAND?
So, what does all this mean for U.S. producers who are preparing to plant a crop this spring?
“The 2022 rally was all about lower supplies,” Freed says. “2023 is going to be about lower demand as prices try to compete with the fact that all these other origins are now cheaper than us.”
Clinton Griffiths is a TV newsman, turned magazine editor, with a passion for good stories. He believes the best life lessons can be found down a dirt road.
