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Corn+Soybean Digest

Meet Your Biggest Soybean Competitor

"It's absolutely awesome." "It's kind of scary for U.S. soybean growers." "It's soybeans on the horizon from zero to infinity."

Those were just a few comments from several U.S. soybean growers, journalists and industry representatives on a week-long tour in mid-January of some of Brazil's soybean growing areas.

For this editor, and 19 others on a trip sponsored by Monsanto, it was enlightening, to say the least. It also was a big wakeup call for American soybean growers.

Consider this: Brazil's land area is just slightly less than that of the U.S. But its population is only about 60% as large. And most of that is along the eastern seaboard, leaving millions of acres as candidates for expansion of "new land" crop acres.

Presently, Brazil is the second-largest soybean-growing country in the world with 40 million acres, compared with 70 million in the U.S. in '97.

Here's the rub: The U.S. has relatively little ground for expanding soybean production. Brazil has tremendous amounts. Some experts estimate that Brazil can expand its crop-growing area by 80-100 million acres - which could make it the number-one soybean producer in the world.

It has a climate advantage, too, since much of the country is south of the equator. Average temps at Rio de Janeiro: 71 degrees in the coldest month, July, to 80 degrees in January, the warmest month. Where we were in east central Brazil, temps ranged from about 65-70 at night to 90 or the low 90s for daily highs.

The planting season is long, roughly 90 days, and soybeans sprout and are several inches tall in just a few days.

"As a U.S. soybean grower, when I saw this area, I became scared for the first time for the American soybean grower," admitted Jerry Slocum, a Mississippi soybean grower and former chairman of the United Soybean Board who was on his second trip to Brazil.

"They have the land, the intelligence and the willingness to do whatever it takes to improve their industry. It's a scary thought."

Added Mark Berg, a South Dakota grower and president of the American Soybean Association: "It's just like looking at an ocean of soybeans. You can drive for 20 miles without seeing anything but soybeans. And the new land area for expansion is phenomenal."

It's more than just a case of natural resources, noted Tracy Thompson, an Iowa soybean grower.

"The Brazilian farmers haven't waited around for the government to do it for them," asserted Thompson. "They have done a better job of soil conservation than we have. I really respect what the Brazilians have accomplished, and I think we had better shape up at home because we have some real strong competition here."

Bruno Alesii, manager of conservation tillage systems for Monsanto and our tour leader, agreed with Thompson that the Brazilian farmers seem to have the "right stuff" when it comes to attitude.

"They seem to have a can-do attitude," Alesii observed. "They seem to have an energy, a willingness to take risks and a passion for the challenges at hand. It's sort of like the Wild West in the U.S. in the 1880s."

The Brazilian growers we talked with agreed that Brazil is a land of vast potential opportunity. But there are also challenges.

They are:

* Cheap river transportation to get soybeans to markets, which we have in the U.S., is lacking. There are almost no railroads, and most exported soybeans have to be trucked several hundred miles from production areas to ports.

* Taxes are "horrendous," according to Brazilian farmers and agronomists.

"There are taxes on everything. It costs you taxes to say good morning," joked 34-year-old Manoel Henrique Pereirag Jr. "Taxes are 34%."

* Interest rates are very high - so high from the federally owned banks that farmers can't afford to borrow from them. Farmer cooperatives or associations are their sources, but rates are still hefty.

The Brazilians, despite the big disadvantages of poor transportation, high taxes and poor storage facilities, are excited about coming biotechnology and the future for them.

"The U.S. is still a land of opportunity, of course, but Brazil is a country with vast new land to open up," declared Jonadan Asuan Min Ma, a large-operation soybean seed producer, whose father was featured in the April 1975 issue of Soybean Digest. "I think Brazil offers an even bigger opportunity now for farmers."

Asked what he thought about the future of soybeans in Brazil, Aureo Eduardo Carvalho replied with a smile:

"It depends on the Chicago Board of Trade.

"But seriously, I think we have a very good chance to prosper. And when we get Roundup Ready beans, I think this will be very good for us as no-tillers."

Like most high-acreage Brazilian soybean growers (he raises 5000 hectares of soybeans), he is well-educated. He has a master's degree in business administration.

Despite the challenges Brazil presents, if U.S. producers and the industry hear the wakeup call and heed it, they can remain a world power in soybean production, observers on our trip believed.

Pete Hill, a conservation tillage specialist with Monsanto, said it well at the end of the trip: "I'm not the least bit nervous for American farmers. Every time there has been a challenge, they have stepped up to the plate and done whatever had to be done."

Summing up: "To stay number one in the world in soybean exports," challenged Slocum, "we have got to be able to produce them at a low enough cost that we can be the highest-quality, low-cost producer in the world. That's the bottom line."

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