Nate Bruce, Farm Business Management Specialist, nsbruce@udel.edu
Brazil has become a major commodity crop producer in the world market with crops there having an impact on domestic prices. The National Supply Company (Conab) has given a recent forecast preview of what to expect in the 2022/2023 crop year. Conab is a public company under the jurisdiction of the Ministry of Agriculture, Livestock and Food Supply. It oversees managing the agricultural production trajectory, including making forecasts.
Conab is forecasting that the 2022/2023 grain season in Brazil could be the be the largest in the nation’s history, exceeding the all-time high record set last season. The Conab forecast for the 2022/2023 season is a 21.2% increase in total soybean bushels produced (5,525 million bushels) and a 9.4% increase in total corn bushels produced (4,941 million bushels). Extreme drought last growing season ravaged yields of both soybeans and corn. Yields are expected to be 17% higher for soybeans and 6% higher for corn. Conab projects the planted acreage will in the country will also increase by 2.5% in 2022/2023.
Profit margins for crops in Brazil are expected to remain strong, despite high input costs. The Brazilian real (domestic currency) has depreciated compared to the dollar, offering favorable exchange rates. This has led to producers seeking to increase planted acreage in 2022/2023. In addition, global demand for grain has been high, particularly after the Ukrainian conflict. This has enabled potential profit margins for grain in the country to remain strong. Grain exports are expected to increase, particularly to China. China, the world’s largest importer of American grain, is seeking to diversify their grain exports and signed an agreement with Brazil in May. A large portion of China’s corn imports previously came from Ukraine (70% came from the United States and 30% came from Ukraine). China is seeking to rapidly begin importing Brazilian grain.
Brazilian Safrinha corn crop. Three different corn harvests occur in Brazil. Safrinha is planted directly after soybeans and is harvested between May and August. Safrinha corn accounts for up to 74% of Brazilian corn production.