Brazil

Global Competition Stiffens as Brazil Increases Cropland and Expands its Transportation Infrastructure

The United States' share of the global soy export market is approximately 33 percent. Argentina and Brazil, however, have a combined 49 percent of the global soy export market. And, in 2003, Argentina and Brazil are expected to produce more than 3 billion bushels of soybeans, surpassing the United States in soybean production for the first time.

Brazil is also poised to expand its cropland by 188 million acres in its Center-West region where cerrado soils, favorable climate and topography offer the greatest potential for expansion. Key to this expansion, however, are improved production practices and crop varieties adapted to tropical conditions. If fully cropped in accordance with the EMBRAPA (Brazil's National Agricultural Research Institute) estimates, the total potential cropland area will exceed that of the U.S. Corn Belt.

It is still unclear as to just how fast this area will come on line for row crops. Its expansion is definitely linked to infrastructure development, which is now taking place. One of Brazil's projects involves building a rail link to the Pacific coast, giving Brazil's land-locked center-west cheaper access to the growing Asian market. As new transportation routes open up Brazil's Center West to international markets, the U.S. can expect increased competition from Brazilian soybean producers.

What Can U.S. & Minnesota Soybean Producers Do?

It is critical for U.S. soybean farmers to continue expanding existing markets while aggressively developing new ones. Four main objectives are being addressed at the state and national levels to increase the profitability and competitiveness of U.S. and Minnesota soybean farmers:

Increasing the utilization of biodiesel
Upgrading transportation infrastructure
Protecting the U.S. livestock industry
Improving the composition of U.S. soybeans

These issues are being directly addressed by MSR&PC and MSGA as identified priorities in their strategic plans.