Fundamentally Speaking

Brazil's Dramatic Increase in Acreage, Production

Joel Karlin
By  Joel Karlin , DTN Contributing Analyst
Chart by Joel Karlin, DTN Contributing Analyst

Besides the Black Sea situation, other price positive factors could be Brazilians delivering a very tight victory to Luiz Inacio Lula da Silva in a bitter presidential election giving the leftist former president another shot at power in a rejection of incumbent Jair Bolsonaro's far-right politics.

Da Silva received 50.9% of the vote and Bolsonaro 49.1%, according to the country's election authority.

News reports are saying however that the morning after the results came in and congratulations had poured in from world leaders, Bolsonaro still had yet to publicly concede or react in any way even as truckers blockaded some roads across the country in protest.

The fact that truckers are protesting should not be lost on the grain and oilseed markets for Bolssonaro had big support from the business community, especially agribusiness and particularly among farmers.

In a number of recent blogs posted we have noted that over the past 20 years Ukraine has become an agricultural powerhouse, but even with their impressive accomplishments it trails the real leader which is Brazil as this country is probably the one with the most upward potential with regard to production, export, and processing capabilities even though they are already huge in those areas.

Now at a time when the world needs massive Brazilian agricultural production of all sorts, there are questions as to whether regressive economic policies from da Silva will curb the huge increase in ag output from that country seen over the past 30 years linked to improved yields, infrastructure and maybe the only country in world where planted area is increasing.

The accompanying chart shows that since 2000, Brazil's combined corn and soybean harvested area has increased 143% while that of the world less Brazil has only advanced by 85%.

Brazil's combined production of these two crops is up by 243% since 2000, yet world less Brazil output advanced only 87% as Brazil's jump in crop yields is far above what has been on a global basis.

This has resulted in Brail now accounting for 19.4% of combined world corn and soybean harvested area vs 12.6% back in the 2000/01 season and their share of production now at 18% vs 10% 22 years ago.


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