An all time record soya crop of close to 75mt (million tonnes), more than 5mt more than the already record 69mt harvested last year, will allow up to 50mt of soya beans, meal and oil to be exported from Brazil this year, writes Patrick Knight.
This will be almost 6mt more than the 44.3mt of soya products shipped from Brazil in 2010.
About 28mt of sugar, 10mt of maize, 1.5mt of coffee and half a million tonnes each of tobacco and cotton, will also leave the country this year. This will take the total exports of bulk farm products to about 90mt, which is expected to earn about US$70 billion.
The Brazilian currency has risen by 40% against the US dollar and other currencies in the past two years, which has handicapped exporters.
But while the strong currency means fewer manufactured goods are exported and more such goods imported, the price of most foodstuffs is high enough at the moment to ensure exports continue to grow.
More than 170mt of grains and oilseeds will be harvested in Brazil this year, 9% more than in 2010.
High prices encouraged farmers to plant grains on about 50 million hectares last year, two million more than in 2009. Favourable weather, plus the increased use of fertilizer and farm chemicals, coupled with investments in new farm machines, meant yields are 4% higher this year than last as well.
Just 10 years ago, about 35mt of the leading farm-based products were exported, earning about $36 billion between them.
Forty years ago Brazil produced only 17mt of grains and oilseeds, grown on 22 million hectares of land.
Although the area planted to crops has grown less than threefold since 1970, output has increased ten times in the past 40 years.
Better-quality seeds have become available, more fertilizer is used and better practices have been adopted.
The world population expected to reach nine billion by 2050, two billions more than now. Ten of millions are migrating to cities and large towns in many countries each year, where they eat better than in the countryside. This means twice as much food will be needed in 40 years’ time than now.
Brazil is one of the few countries which is able to continue to produce and export much more food, as its own population, now 194 million, will soon stabilize.
Much of the increase will come about through continued rises in productivity.
While a decade ago, less than two tonnes of soya was grown on the average hectare of land, the average is now three. The best-managed farms produce four tonnes. Although the rise in productivity is not expected to continue at the 2–3% of the past few decades, the development of new seeds and improved husbandry, together with the increased use of fertilizer, will still allow it to grow
Most of the extra land now planted to crops each year was previously used to graze cattle in an ‘extensive’ manner.
Twenty years ago, the average animal had two hectares of poor quality pasture to feed on.
But improvements to genetics, and rotation of animals between smaller plots, and other practices have pushed the average to less than one animal per hectare. It will soon be three or four.
Although the herd has shrunk in the past few years, the amount of meat produced has increased.
Farmers planting grains, sugar cane and eucalyptus can afford much higher rent than the ranchers.
About 20 million of the 200 million hectares once used for extensive grazing, has already switched to arable crops in the past few years.
A further 70 million hectares is expected to switch in the next few years, by which time Brazil will be producing at least 200mt of grains, as well as twice as much sugar cane than the present 600mt or so.
Fast-growing demand from China, which bought 19mt of the 29mt of soya beans exported last year, as well as almost 2mt of soya oil, help explain the current high prices.
Until now, China has not imported much sugar or maize. But with the urban population growing fast, and land and water resources limited, this is changing.
Although improvements to yields will allow output of the soya, maize, cotton, rice and tobacco grown in the south and south east of the country to continue to grow, farmers are now expanding to the north and west of the country as well.
In the far west of the country, Mato Grosso was almost uninhabited 20 years ago.
But the state is now Brazil’s leading producer of soya, as well as of cotton, now planted and harvested by machine rather than by hand, as it was until recently.
Almost as much maize is now grown in the winter as the summer. This has allowed Brazil to cease importing maize, to being an important exporter. Maize is now planted in the winter in the far west, where soils remain sufficiently humid in the cool winter months to allow a second crop to be grown there.
But soya is now migrating to three states in the north east, Tocantins, Piaui, and Maranhao. New rail links are allowing the grain grown there to be exported via Itaqui, now a leading port for the export of iron ore.
Roads running north from the main soya growing regions in Mato Grosso and Goias to the Amazon river are now being paved, allowing more to leave via the north.
Ports there are considerably nearer Europe, which buys most of the 14mt of soya meal shipped each year, as well as China, main destination for two thirds of the beans and an increasing proportion of the oil, than those in the south.