Jan 25, 2024

Brazilian Senate Proposes National Grain Storage Program

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

On December 14, 2023, a proposal for the creation of a national program to address the lack of grain storage was introduced into the Brazilian Senate. The National Storage Program (Proana) is designed to address the chronic lack of grain shortage, especially in the areas of expanding agriculture.

The lead senator promoting the program cited data from the Agriculture and Livestock Federation of Brazil (CNA) that increased storage would produce economic gains for Brazilian producers. Approximately 15% of Brazil's grain storage is on-farm, which means that farmers must transport their grain sometimes long distances to third party storage facilities. Farmers generally contract independent truckers to move their grain to storage facilities and freight rates increase during harvest periods.

On average in Brazil, third party storage facilities are located 35.1 kilometers (21.8 miles) from production fields. The state of Piaui has the longest distance of 110 kilometers (68.3 miles). The shortest distance is in the state of Rio Grande do Sul at 16.1 kilometers (10.0 miles). With more storage facilities closer to production fields, farmers would save on transportation costs.

The program stipulates that 95% of the material used in construction of new storage facilities be made in Brazil, which would stimulate industrial production and job creation.