Brazil is one of the few countries in the world that has the potential to greatly increase both agricultural land and yields. It is the fifth biggest country in terms of both area and population. From exporting tropical goods like coffee, sugar, and cacao in the 1960s and 1970s to becoming a major world supplier of soybeans, soybean products, corn, cotton, sugar, coffee, orange juice, meat, and ethanol in the early 21st century, Brazil has experienced a remarkable change. The United States now has a lot of competition from Brazil in many of these farming goods on the world market. Most countries in the world buy farming and food goods from Brazil.
This includes the United States and the European Union. Soybeans are one of the most important crops for Brazil’s farm sector to grow and for the country to become a major supplier of agriculture goods around the world. Soybeans have been grown commercially since the 1940s, but it wasn’t until the 1960s and 1970s that they were grown on a larger scale in the southern part of the country. The Brazilian Agricultural Research System (Embrapa) helped with this success, along with a lot of policies in the country to support rural agriculture, changes made to markets and institutions in the 1980s, and policies to encourage farming in the Cerrado forest. Brazil’s economic and political changes made the country’s economy more stable, and the rise in commodity prices in the mid-1990s made it even easier to grow soybeans. According to the USDA’s long-term agricultural forecasts, between marketing years 2021/22 and 2032/33, Brazil’s share of the world’s soybean trade could rise from 51.3% to 60.6%. Rising demand for soybean imports from China is what has driven Brazil’s export growth. China is the world’s largest soybean market destination.
Brazil’s agricultural sector is changing because of things like agricultural research that has led to higher yields, more arable land, investments by the government and private sector in production technologies to create new crop and forage varieties, and a rise in demand for food and animal feed around the world, especially in the last ten years. The output of agriculture went up because of export-oriented macroeconomic policies, crop-specific agricultural policy incentives, and more foreign investment and international companies in the country. As long as productivity keeps going up and more land is made available for farming, crop production and exports should continue to grow. That being said, Brazil will continue to need farm products, including higher-value goods imported from the US, because its population and per capita income are rising. The Economic study Service (ERS) does study and analysis on Brazil’s economy, trade, agricultural sector, outlook, and policies. ERS reports go into great detail about how Brazil’s economy is changing, including the exchange rate, agricultural policies and structures, how the country responds to changes in oil prices, improvements to transportation facilities, and the reasons why trade and agricultural production are growing. When it comes to Brazil’s agricultural business, ERS reports talk about things like There has been growth in Brazil’s role as a major producer of agricultural goods and related food items, as well as an exporter to other countries. Brazil’s agricultural growth plan is still based on continuing to grow trade and expanding into new markets and products.
Some things that could stop the Brazilian agricultural sector from growing in the long term are rising costs for fuel and fertilizer, limited credit and storage space, a port and transportation system that is overworked, and environmental protection efforts. Macroeconomic strategies have helped Brazil become one of the most competitive exporters of agricultural goods in the world. In the past few years, the country has been able to quickly increase its agriculture exports, even though it went through one of its worst recessions, saw commodity prices drop around the world, and felt the effects of the COVID-19 pandemic on its economy. A study by ERS looks at how changes in the economy as a whole affect Brazil’s agricultural production and trade. The study is called Brazil’s Agricultural Competitiveness: Recent Growth and Future Impacts Under Currency Depreciation and Changing Macroeconomic Conditions and was published in September 2020. Soybeans make up the biggest and most concentrated part of trade in farming goods around the world. Most of the world’s soybean exports come from two countries with lots of land: Brazil and the United States. More than 60% of the world’s soybean imports come from China. Brazil has become the biggest soybean exporter in the world, and it competes with the US for China’s soybean import market.
One reason for this is Brazil’s long-term plan to farm the large savannah areas called Cerrados, which will bring soybean production into the country’s vast inland regions (see Interdependence of China, United States, and Brazil in Soybean Trade, June 2019). Not only is Brazil turning range, pasture, and other land into farmland because of higher food demand at home and abroad, but the country is also making more ethanol and policies have made more people want sugarcane, which is the main ingredient used to make ethanol. Because the supply and demand for ethanol are connected to those for oil, oil prices affect how sugarcane and other agricultural goods are grown.
Due to its late harvest of second-crop corn, Brazil has become the biggest competitor to the U.S. in the world corn market. Exports from September to January were higher than those from any other country. If the seasonality of U.S. corn exports changes, so could the seasonality of U.S. corn prices. This would make corn prices even lower at harvest and hurt U.S. export market share. To learn more about Brazil’s farming industry and how competitive its exports are, you can look at farm prices from different countries. These prices should include farm-level production costs, the cost of handling and transportation within the country, and the cost of shipping to a common export destination (see Corn and Soybean Production Costs and Export Competitiveness in Argentina, Brazil, and the United States, June 2016).
The Brazilian farming industry has gone from using mostly old-fashioned methods and not many current technologies to being a world leader in farming. Brazil’s efforts in science and technology, along with other government policies, have been very important in helping the country find its agricultural potential and boost farm production.
