Dec 17, 2021
Conventional Soy Acreage (non-GMO) in Brazil Expected to Increase
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Brazilian farmers who plant conventional soybeans (non-GMO) have been happy with the results. The Free Soybean Institute (Instituto Soja Livre) which promotes conventional soybean production, estimates that 3% of Brazil's soybeans are conventional varieties and that the state of Mato Grosso plants 60% of the total conventional soybeans in Brazil.
The state of Mato Grosso is the major producer of conventional soybeans in Brazil because the Port of Porto Velho on the Madeira River in northern Brazil has facilities dedicated to conventional soybean exports. These dedicated facilities are necessary in order to reduce any potential contamination with GMO varieties.
The majority of Brazil's conventional soybeans are exported to Europe and recently the demand is outpacing the supply since India, which is Brazil's major competitor, has been out of the market since the start of the pandemic.
The premium for conventional soybeans from the 2020/21 crop was in the range of US$ 6 per sack of 60 kilograms or approximately US$ 2.70 per bushel. In recent years, it has been as low as US$ 0.80 to US$ 1.20 per bushel, which was a disincentive for producers. Soybean producers in Mato Grosso now maintain that they make more money growing conventional soybeans compared to GMO varieties.
The Mato Grosso Institute of Agricultural Economics (Imea) calculated that the cost of production for conventional soybeans is 4% higher than for GMO varieties, but the return on conventional soybeans is equal to producing 7 sacks per hectare (6.2 bu/ac) more than for GMO varieties.
Brazilian producers are looking toward China to expand their market, but they are in a dispute with the Chinese government over quality standards. Conventional soybeans exported to Europe have a 0.1% tolerance for purity or in other words, conventional soybeans must be 99.9% free of GMO soybeans. China is insisting on 100% purity with zero tolerance for GMO soybeans. Brazilian producers insists that is an unrealistic standard in a country where the vast majority of the soybeans are GMO varieties.