Brazil's huge scope for grains expansion

Brazil's huge scope for grains expansion

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POTENTIAL: A Brazilian farmer harvests soybeans.

POTENTIAL: A Brazilian farmer harvests soybeans.

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As Australia closes in on its peak cropped area there is no such issue in Brazil, where fertile land can easily be brought into cropping.

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BRAZIL has emerged as a serious player in the grains industry in the past decade, especially in corn and soybeans.

The South American nation is now routinely the world's largest exporter of soybeans, and analysts say the industry is only going to continue to grow.

Speaking at the Australian Grains Industry Conference last week CHS global research analyst Joe Lardy said Brazil's planted hectares were expanding rapidly every year.

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While an ANZ report has recently suggested Australia is at its peak cropped area, with little natural room for expansion, Mr Lardy said there was a substantial amount of undeveloped land in Brazil suitable for cropping.

He pointed to the nation's fertile southern states such as Mato Grosso and Minas Gerais as the engine room for future increases in plantings.

"In Mato Grosso only 7-10 per cent of the land is row crops," Mr Lardy said.

"Of the rest there is a large amount of pasture, cerrado (scrubland) and rainforest.

"Obviously the rainforest is off-limits and while it is possible to transform the cerrado into arable land it is quite a process, but the pasture country is very easy to bring in to cropping, is very productive in terms of fertility and there is a massive amount there.

"Around 25pc of Mato Grosso is pasture and that is easy to bring into row crops if the farmers desire.

"Given the good prices on offer with soybeans at present I would think Brazil will continue to grow in terms of its planted area."

Mr Lardy said Brazil would continue to remain an export focused market.

"The supply chain is set up for exporting," he said.

"They grow the crop, they move it to port, they export it, they do not store a lot of the grain that is produced."

The story Brazil's huge scope for grains expansion first appeared on Farm Online.

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