August 17, 2012

Brazilian Minister puts Emphasis on Increased Corn Production

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

The worst drought in decades in the United States and the resulting disappointing corn production is renewing interest in the potential for increased corn production in Brazil. Brazil is expected to surpass Argentina as the second leading corn exporter in the world after the U.S. As a result, the Brazilian Minister of Agriculture and Livestock Supplies (Mapa) has conducted a detailed study of 563 micro regions of the country as to the potential for increased corn production in the regions.

The goal of the study is to develop long-term strategies that would allow corn production in Brazil to catch up to the excellent soybean production already achieved in the country. The ultimate goal is modeled on the U.S. production system where there is approximately four tons of corn produced for every ton of soybeans produced.

To develop this long-term plan, the Ministry of Agriculture is working with other governmental organizations including Embrapa and Conab as well as the Brazilian Association of Corn Producers (Abramilho). Their joint goal is to increase the productivity of areas that are already important corn producing regions and to reduce the cost of production and transportation in areas that are currently minor producing regions.

The president of the Brazilian Association of Corn Producers (Abramilho) Alysson Paolinelli, fells the principal obstacles to increased corn production in Brazil include: high yielding corn hybrids adapted to the soils and climate of Brazil, a lack of adequate storage capacity, inadequate credit for storing and merchandizing corn, the high cost of transporting and exporting the corn, and a guaranteed minimum price for corn that is high enough for producers to continue producing corn in times of adequate or surplus supplies.

Corn production in Brazil has always been secondary to soybean production, which is the country's leading crop. That has begun to change in recent years with the introduction of higher yielding corn hybrids and the increased importance of the safrinhacorn crop. After soybean rust was discovered in Brazil in the early 2000's, the hope of producing two or even three soybean crops per year was abandoned and instead, farmers started to increase their production of safrinhacorn which is planted after the initial crop of soybeans are harvested. The safrinhacorn production has been so successful that it has now surpassed full-season corn production in Brazil

The principal obstacle to long-term potential for corn production in Brazil is probably the lack of adequate infrastructure to efficiently move the production from the interior of the country to the livestock producers in southern Brazil and the exporters in southern Brazil.