The South American country is poised for a top spot on the crop leaderboard
In the battle for corn and soybean market share, Brazil has made huge inroads in the past few decades. The South American country is the world leader in soybean production and is third in line for corn production. Buoyed by record profitability and a strong export program, expect further expansion in Brazilian corn and soybean acres.
“This year in particular, profits are fueling Brazilian corn and soybean production expansion,” says Aaron Edwards, ag consultant with Roach Ag Marketing. “It’s worth the fertility and other expenses what used to be a five-year payback is now a one- or two-year payback.”
Beyond profitability, expansion of corn and soybean acres are being spurred by several factors, says Joana Colussi, academic researcher at the University of Illinois. They include:
- Investments in irrigation.
- Land availability in agricultural frontiers, such as Matopiba.
- A growing season that supports multiple harvests per year of grain.
- Technological advances in soil management and improvements in hybrid corn varieties.
- Improvements in roads, railways and waterways.
“Brazil has the largest agricultural area capable of expansion among all the large producing countries in the globe,” Colussi says.
On the flip side, Edwards says Brazilian farmers lack standard crop insurance programs, have insufficient on-farm storage and don’t have financial credit options to support storing grain. Efforts are in place to improve all of those, he says, with the big focus on storage.
“We’ve all seen pictures of trucks lined up in Brazil at harvest,” Edwards says. “If they could just tuck it away on their farm and wait for the dry season, they would remove those logistical nightmares.”
Even if global commodity prices cool, Brazilian acres won’t likely contract, Edwards says: “Whatever acres are added will probably stay in production and just be new supply for the global marketplace.”
In the next decade, corn acres are projected to expand by 30% with the highest growth in safrinha production (corn as a second crop). Soybean acres are projected to increase by 109% through the conversion of degraded pastureland and clearing of new land.
