Sep 23, 2021

In Brazil Returns Higher for Conventional Soy (non-GMO) vs. GMO

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

Most of Brazil's soybeans are GMO varieties, but a small percentage of the crop is conventional soybeans that are non-GMO. The conventional soybean production in Brazil is concentrated in the state of Mato Grosso where less than 10% of the state's production are conventional soybeans.

Conventional soybeans must avoid contamination from GMO varieties during harvesting, transporting, and exporting. Conventional soybean production is concentrated in Mato Grosso because there are ports on the Amazon River that focus on the export of conventional soybeans, thus helping to avoid contamination.

Studies conducted by the Mato Grosso Institute of Agricultural Economics (Imea) indicate that conventional soybean varieties provide producers with higher returns than GMO varieties. Imea estimates that the return on conventional soybean production is R$ 833 per hectare higher than for GMO soybeans (approximately $73 per acre). Even though conventional soybeans are a little more expensive to produce, the difference is the premiums offered for conventional soybeans. Imea estimates the cost of production for GMO soybeans is R$ 5,081 per hectare vs. R$ 5,251 per hectare for conventional soybeans.

In August, Imea calculated that the average statewide yield for conventional soybeans was 56.8 sacks per hectare (50.7 bu/ac) compared to 60.6 sacks per hectare for GMO soybeans (54.1 bu/ac). But, when all the costs and premiums are considered, conventional soybeans resulted in a greater return equal to approximately 5.7 sacks per hectare (5.1 bu/ac).

Conventional soybean production in Brazil is promoted by the Institute for Free Soybeans (Instituto Soja Livre). According to its president, Cesar Borges in an interview with Noticias Agricolas, most of Brazil's conventional soybeans are destined for the European market for animal rations for poultry, eggs, and dairy producers. This is a well-established market that shows no signs of diminishing. Since 2016, the European Union has doubled its production of conventional soybeans, but it has not been enough to meet the internal demand.

A smaller percentage of the conventional soybeans are exported to China where they are used for human consumption.

Due to potential competition from India, Russia, and Ukraine, Borges is encouraging conventional soybean producers in Brazil to become better organized so they can increase their acreage and production. With increased production of conventional soybeans, there are less logistical problems and reduced chances of contamination with GMO soybeans.