Brazil could take soybean production crown from U.S.

It appears Brazil might achieve another milestone in its progression as an agricultural powerhouse.

It could become the world’s largest soybean producer in 2018-19, taking the title from the United States.

The U.S. Department of Agriculture forecasts that the South American country will produce 117 million tonnes of the oilseed in the coming year, topping the forecast for America at about 116.5 million.

The forecast implies that Brazil will produce a repeat of this year’s record 117 million tonnes. That was just shy of America’s 119.5 million, itself a record for that country.

The Brazil harvest this year is more than double what it was 10 years ago and almost four times as much as it grew 20 years ago.

The rise of South American soybean production is one of the biggest developments in agriculture in the last couple of decades.

On the export front, it was around the middle part of the last decade that Brazil and Argentina combined began to export more soybeans than the United States.

By 2011, Brazil by itself began to export more soybeans than the U.S. Its crop was still smaller but it was able to export a larger percentage of it because its domestic demand is less than America’s.

Today Brazil grows about the same amount as the U.S. and its soybean exports exceed the U.S. by 23 percent.

Its progress in corn is also impressive, with production almost doubling in the past 10 years, although dry weather this year is limiting harvest forecasts.

Most of the growth in corn is in the second crop, that is the one seeded directly after the soybean harvest. In Portuguese, it had been known as the safrinha or little crop, but it now is bigger than the first crop that is seeded concurrently with soybeans.

Investments in Brazil’s grain transportation and port infrastructure have been huge but not enough to keep up with demand.

China increasingly turns to Brazil for soybeans and meat and Chinese companies are investing heavily in Brazil’s infrastructure, helping it to catch up.

At the annual USDA Outlook Forum in Washington, D.C., in February, Roberto Rodrigues, owner of a Brazilian mega farm and former agriculture minister, said he believes the country could increase crop and beef production by 40 percent by 2040.

Many are concerned about the environmental impact of such growth, but Rodrigues claims another 40 million acres of land could be put into production without harming the Amazon rain forest.

It might not destroy the rainforest but it would likely further transform the cerrado, Brazil’s tropical savanna, which is not seen as a national treasure the way the rainforest is.

About the only thing that could derail Brazil’s agricultural growth would be for the cerrado to catch the attention of the world’s environmental movement as have palm plantations in Indonesia and Malaysia and the damage they do to tropical forests there. Some European processors and supermarkets are putting heavy pressure on palm producers to be more sustainable in their production.

But I expect that won’t happen. A savanna, or plain, just doesn’t have the profile that a forest has.

The growing importance of Brazilian production, like the expansion of cropping in Russia, will slowly transform market analysis.

An enormous amount of attention and monitoring is lavished on U.S. crops, especially in the fertile Midwest.

There is less information on crops elsewhere in the world, but as they grow in importance expect to see the microscope of attention to turn their way.

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