Canwood, Sask., farmer Randy Hoback has gotten into the habit of flying thousands of miles to Brazil to see the writing on the wall.
It’s not a pleasant read.
“There’s no way we can compete with these guys,” said Hoback, a mixed farmer who now leads tours to Brazil’s main farming regions.
“When it comes to bulk commodity production, I don’t see how we can keep up with them.”
On Jan. 12 Hoback left for another tour of Brazil, leading nine prairie producers who want to see what many analysts consider to be the new agricultural superpower Ð one that is expected to become more dominant each year.
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Brazil is already the world’s largest coffee, sugar and orange juice exporter.
This year Brazil is expected to also become the world’s largest soybean exporter, knocking the United States off of its traditional pedestal. With soybeans setting the base for world vegetable oil prices, Canadian canola farmers now will have to watch Brazilian soybean prospects as closely as they have followed the American crop.
Brazil has the world’s largest beef cattle herd, with about 160 million animals, and produces the second largest amount of beef, after the U.S.
It is already a major supplier of low quality beef to the European Union and elsewhere. If Brazil can rid itself of foot-and-mouth disease and begin feeding grain to its animals, it will probably become a major competitor in the high quality part of the market – an area where Canada excels.
Brazil doesn’t intend to stop at this already impressive level. The government wants to create 1.3 million new jobs in agriculture in 2004 alone and has long range plans to open tens of millions of acres of new land to agriculture.
Multimillion acre increases in the land base won’t be the only driver of its production. Many of Brazil’s agricultural production methods now are far behind those of Canada, but that is changing as farmers and investors put their money into modern methods. The government is investing in grain transportation infrastructure and views agriculture as one of the brightest prospects in its economy for growth.
With production costs well below those in North America, Brazil may become the world’s price-setter.
This means Brazil’s recent surge is no flash-in-the-pan, but a fact of life for farmers who sell into world markets. That’s why some North American farmers are beginning to look closely at Brazil and to figure out how to react to the new giant.
Hoback said American soybean growers he toured with in Brazil were stunned by the vast expanses of newly opened land ready for use. Because of the balmy weather, some Brazilian farmers can grow five crops in two years, something North American farmers can only dream of.
“The first couple of days they were just shocked,” said Hoback of his American colleagues.
“The third day they had their pencils going.”
Hoback said some farmers who see Brazil’s potential are thinking about moving there.
Others, like him, want to learn what Brazilian farmers can do best, so they can concentrate on doing some-thing different.
“Head to head, I don’t think we can compete in commodity production,” said Hoback.
“We have to find niche markets, and concentrate on IP (identity preserved) production.”
Hoback said getting to know the Brazilian competitor is going to help him make his Canadian farm viable for the long term.
“I love this life, and I’m going to find a way to make it work,” he said.
