January 16, 2013

Use of GMO Crops Continues to Expand in Brazil

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

The use of GMO soybean and corn varieties by Brazilian farmers continued to expand in 2012/13. According to a report from Expedicao Safra Gazeta do Povo (this is a private organization and not an official government estimate), 89% of the 2012/13 soybean crop in Brazil and 85% of the 2012/13 full-season corn crop are GMO varieties. The chart below illustrates the steady increased use of GMO crops in Brazil over the last several years. Note: nearly all the corn produced in Mato Grosso is safrinha corn planted after soybeans; therefore Mato Grosso was not included in the full-season corn tally.

Percent of Planted Area in Brazil that is GMO
State/Crop2009/10 2010/11 2011/12 2012/13
Parana soybeans 66%83%85%87%
Mato Grosso soybeans55%66%68%82%
Brazil soybeans70%85%87%89%
Parana corn - full season 44%71%85%88%
Brazil corn - full season50%77%83%85%
Source: Expedicao Safra Gazeta do Povo

While the commercial seed companies continue to heavily promote the advantages of their genetically modified products, there is a segment of the Brazilian farming population that continues to use conventional soybean varieties (non-GMO). There is a niche market for conventional soybeans especially in Europe where end users are willing to pay a premium of R$ 2 to R$ 5 per sack for conventional soybeans (approximately US$ 0.44 to US$ 1.10 per bushel).

According to the director of the Brazilian Non-Genetically Modified Grain Producers Association (Abrange), farmers can make larger profits by planting conventional soybeans compared to GMO varieties if they manage their operations correctly. He credits the increased profits to the premiums paid for conventional soybeans and the fact that no royalties are paid to the seed companies. According to Abrange, the cost of producing conventional soybeans is equal to GMO varieties and the yields of conventional soybeans can be equivalent to GMO varieties.

The question then is why are 89% of the soybeans grown in Brazil GMO varieties? The answer is that GMO varieties are much easier to manage than conventional soybeans. Roundup herbicide can be applied to Roundup Ready soybeans at virtually any time allowing the farmers more flexibility at planting time. He can plant his soybeans as quickly as possible and not have to stop planting at certain times in order to apply herbicides to previously planted soybeans. He can plant everything all at once and then go back later when he has time to apply his herbicide. This allows the farmer to manage a larger acreage of soybeans without a larger workforce.

In addition to less flexibility at planting time, conventional soybean production also requires more management effort at the time of harvest and marketing of the crop to insure the soybeans are not cross-contaminated by GMO soybeans. This requires much more effort on the part of farmers, trucking companies, grain elevators, and exporters to keep the product identity preserved.

Abrange was created in 2008 to promote the use of conventional soybeans and their efforts have convinced some Brazilian farmers to continue producing conventional soybeans for their customers that do not want GMO products. Their efforts have paid off to some degree, but conventional soybean production in Brazil will have a difficult time taking market share away from GMO varieties. I think the best they can hope for is to keep the GMO market share from not surpassing 90% of the market.