July 22, 2022
Brazil is currently harvesting its largest corn crop on record, potentially surpassing 4.5 million bushels. While still less than one-third of the U.S. corn crop, their production has doubled in the last decade. The country’s corn exports have quadrupled in that same time frame, closing the gap between themselves at number two for exports and the U.S. at number one.
The USDA is already projecting an even larger Brazilian crop for next year. I will be there next January between the soybean harvest and the corn planting to go check it out, and you are invited!
Right before the pandemic started in 2020, we hosted a tour of American farmers to Brazil. We visited my family’s farm in Brazil as well as some of the mega operations in Mato Grosso. We visited farms with 50,000 acres of soybeans under cultivation. They had close to 10 combines harvesting in one field at a time. They appeared to harvest what seemed like 80 acres in about ten minutes.
The large farms are impressive, but one of the smaller family farms we visited was just as interesting, perhaps because you are speaking directly to the owners, and you get to meet your competition face-to-face. You get a sense for some of the challenges they faced developing their region.
After you drive around Mato Grosso for a while, you start dreaming about soybeans – as that is all you see. We broke it up with visits to coffee fields, cotton gins, seed suppliers, equipment dealerships and new corn ethanol plants. We even made time for the beach in Rio de Janeiro.
With 150 million acres under cultivation, Brazil still has the capacity to add another 100 million acres into production. That is more than any other place in the world. One of Brazil’s greatest challenges continues to be their infrastructure, specifically getting it to the ports.
Transportation companies have invested heavily in expanding Brazil’s ports. While the country still relies heavily on truck transportation, the wait time at the ports has been reduced. Most of the improvements have been seen in the Northern Arc region of Brazil where nearly one-third of soybeans are exported from Mato Grosso. It is not just a matter of getting crops out, but getting inputs in as well, as 85% of Brazil’s fertilizer is imported.
If you are interested in joining our tour, check out more information at https://www.commstock.com/brazil-farmland-tour/
Matthew Kruse is President of Commstock Investments. He can be reached at 712-227-1110. Subscribe to their market report at www.commstock.com.
Futures trading involves risk. The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that CommStock Investments believes to be reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.
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