May 15, 2012

Brazilian Corn Production Estimated at 80 million tons by 2020

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

During the recent Agrishow 2012, a group of corn producers, corn processors, and end users gathered to lay out goals for a compressive plan of action for the long-term growth of the corn industry in Brazil. Led by the Brazilian Association of Corn Producers (Abramilho), the group wants to build on the success of what is anticipated to be a new record corn production in Brazil in 2011/12.

Abramilho plans to develop this compressive strategy by including every stakeholder connected with corn production in Brazil including: corn producers, public and private researchers, suppliers of inputs such as seed, fertilizers, chemicals, transportation companies, storage providers, processors, exporters, food producers, as well as producers of poultry, swine, and beef.

The plan is to stimulate the production of corn in Brazil from its present level of approximately 65 million tons to at least 80 million tons by the year 2020. They feel the demand for corn, both domestically and internationally, will easily be able to absorb the increased production. In fact, livestock producers in southern Brazil have been complaining since the last time that corn prices spiked in 2008 that greater corn production was needed in order to hold down their feed costs.

Even Brazil's beef industry is ramping up its consumption of corn. Brazil's beef production used to be nearly entirely grass-fed, but the number of cattle on-feed has increased greatly in recent years for two reasons. First, farmers in Brazil have been converting pastureland into additional row crop production as a way to primarily increase their soybean and corn production. This avoids the necessity of clearing new land which is becoming increasingly more complicated in Brazil due to stricter environmental regulations. Since less pasture is available, ranchers have been turning to feedlots to supplement their production.

Secondly, increased safrinha corn production has made more corn readily available in traditional cattle ranching areas of the country. With more corn available locally, these feedlot operations have become more viable.

The first action Abramilho wants to see occur is for Embrapa to conduct the type of research that is necessary to increase corn production in all regions of the country, especially in traditional corn deficit regions such as southern Brazil where much of the livestock production is concentrated.

In addition to corn research, Embrapa also includes grain sorghum in its research program. Brazil is not a major producer of grain sorghum, but sorghum is an important alternative for safrinha corn production. If safrinha corn cannot be planted in a timely manner, grain sorghum would be a better alternative because it can prosper with less rainfall than corn. It is more tolerant to dry conditions and suitable for this second crop production.