May 22, 2017

Nearly 70% of Brazil's Grain Production is in Four States

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Brazil is the United States' number one competitor for agricultural exports and it will continue to expand its agricultural production going forward. Even though Brazil is a very large country, nearly 70% of Brazil's grain production is concentrated into four states: Mato Grosso, Parana, Rio Grande do Sul, and Goias.

In their latest monthly crop report, Conab estimated that Brazil will produce 232 million tons of grain during the 2016/17 growing season. The number one producing state is Mato Grosso with 58 million tons, second is Parana with 41.5 million tons, third is Rio Grande do Sul with 35.3 million, and fourth is Goias with 22 million tons.

As reported by So Noticias, the farmers in Mato Grosso are expanding their grain production through a combination of bringing new land into production and using a high level of technology in their production. In recent years, the majority of new grain production in the state has come from the conversion of degraded pastureland into row crops. While grain production in the state only has a history of a few decades, farmers in the state consistently use a higher level of technology in their production than average in Brazil.

Parana is second in grain production and it is considered the traditional grain producing state in Brazil. There is a long history of agricultural production in the state and most of the prime agricultural areas of the state are already being utilized. Any further increase in agricultural production in the state will be through increasing the productivity per hectare.

During the past seven growing seasons, the crop producing area of Brazil has increased 13 million hectares (32.1 million acres), which is an average of 1.8 million more hectares per year (4.4 million acres). Undoubtedly, the production of soybeans has been the driving force behind this expansion. Large-scale commercial soybean production started in southern Brazil in the 1970's and the crop spread to central and northern Brazil over the intervening decades. Soybeans can be credited for the modernization of Brazilian agriculture.

Soybeans cultivation took over traditional areas of full-season corn and full-season cotton production especially in southern Brazil. The result has been that now the majority of corn and cotton production in Brazil has been shifted to double crop production following a first crop of soybeans.

While the state of Sao Paulo is not one of the main grain producing states in Brazil, it still ranks near the top in agricultural receipts. The agricultural production in Sao Paulo is not focused on grain production, but on high value crops such as coffee, sugarcane, and oranges.

Even though international commodity prices have been in a multi-year decline, grain production has continued to expand in Brazil and there is no end in sight for the expansion. Brazil has hundreds of millions of acres that could be converted to row crop production over the coming decades. When commodity prices rebound, as they always do, Brazil is poised to take advantage of the improved prices by greatly expanding its grain production.

the weather, the know how, and soficicated agriculture with hunfreds of millions of acres that could be converted to grain production