Farm Progress is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Serving: United States
Corn+Soybean Digest

Politics Takes A Real Kick

Brazil, as a country, faces a number of tough choices this year. Many of those choices will affect farmers across the Americas.

For one, this is an election year, and presidential candidates at a recent debate brought forward only vague proposals regarding agriculture.

And then there are the more immediate choices for farmers to make, like planting intentions. At this writing, September plantings are about to begin in some parts of Brazil's vast soybean-growing area, and farmers are deciding how much of that area to plant with beans.

Around here, farmers are likely to plant, by some estimates, up to 10% more soybeans, based on at least two factors that make the crop more attractive this year:

  • Prices

  • Devaluation of the Brazil real currency

Soybean prices are up, and some farmers are buying their inputs based on forward contracts — something which is harder to arrange with other crops such as corn.

Most medium and large producers here are aware of the USDA reports predicting a shorter U.S. harvest due to lack of rain. They are, of course, hedging their bets that prices will hold or rise.

Meanwhile, the real has lost value against the dollar, making beans, which are traded on a dollar price set in Chicago, more profitable in Brazil and Argentina.

Another Brazilian decision that can affect the U.S. appears to have been quietly taken by bureaucrats. The officials hired an international law firm and completed an economic study that reports U.S. soybean “subsidies” have cost Brazilian producers more than a billion dollars in lost income.

In addition, it appears that ministry officials have put their World Trade Organization case against the U.S. soybean regime on a shelf, at least for now.

While the Ministry of Agriculture says it had a good case, a decision was taken to focus all the country's efforts on the case against the U.S. steel tariffs.

This may have been a wise decision, since rising world prices have hurt the Brazilians' ability to show the kind of actual harm needed to make a case.

However, ministry officials have made it clear that the case is put on ice, not buried, and could be resuscitated again at any time.

That decision didn't halt the sentiment of one Brazilian presidential candidate, calling the new Farm Bill a “flagrant” U.S. strategy to negotiate a free trade bloc while impeding the entry of Brazilian ag products such as orange juice.

There are many tough choices for Brazilian agriculture. However, if the right choices are made, Brazilians feel the game is definitely winnable.

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.