May 29, 2023

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Brazil’s corn harvest and exports hit record highs

In the corn fields of Brazil, the world’s second-largest exporter after the United States, farmers are wrapping up the annual harvest, which is set to reach record levels.

An increase in acreage, generally favorable climatic conditions and an increase in productivity helped double its overseas sales.

Brazilian grain production will rise 30.1% this year to a total of 113.3 million tonnes, driven by an equally historic second harvest, with 86.1 million tonnes of maize produced (+41.8%), its national distribution agency (Conab) noted. Last report of the season.

Brazil is expected to export 20.8 million tonnes of maize last year.

“The world market is very focused on the US harvest and the sharp drop in production in Europe,” Paolo Molinari, an analyst at Safras e Mercado, a net importer, told AFP.

“But Brazilian corn is promising about grain availability. Without this harvest, the price hike will be much higher,” he adds.

Severe drought-stricken China, a major producer and consumer of maize, stepped up its negotiations with the South American firm and signed an agreement in May to open its market to the Brazilian grain. management.

As for Europe, “it is buying a little more Brazilian corn than usual, especially Spain, Portugal and the Netherlands”, Mr. Molinari notes.

– Two harvests per year –

Introduced in the early 1980s, “safrinha” (“small harvest”) maize, sown as a second crop after soybeans, overtook the summer harvest (astral) a decade ago, representing 75%. Total production this year.

At the same time, the areas occupied by summer corn were allocated more to oilseeds. “Unlike in the Northern Hemisphere, Brazil’s tropical culture makes it possible to have two harvests in the same year,” recalls Lucileo Alves, a researcher at the Center for Advanced Studies in Applied Economics at the University of São Paulo (Sebia).

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“Seeking to intensify the use of their land, Brazilian farmers anticipate sowing soybeans in October and harvest as early as possible in February, allowing corn to be planted later and benefiting from good yields for both crops.”

Soybean seeding prospecting and maize improvement were made possible by the use of transgenic varieties “improved over time” for both crops “Safrinha” and are present in almost all fields today.

This year, “despite a sharp increase in production costs, the high level of grain prices and the expectation of a soybean harvest encouraged producers” to increase the area of ​​their “Safrinha” corn crop (+9 .2%), the largest ever observed, Konab notes in its report.

These farmers were able to take advantage of the best window for planting grains and despite the drought and temperature drop in many production areas, they benefited from generally favorable weather, especially in the state of Mato Grosso, the country’s main supplier.

– Inadequate storage capacity –

This enabled Brazil to register a 20.2% gross manufacturing gain. “By occupying already open spaces and pastures that have been converted into agricultural areas, the area of ​​winter corn can be further doubled without deforestation,” assures Glaber Silveira, executive director of the Brazilian Corn Growers Association (Abramilo).

But the South American company faces several challenges, including storage capacity that is “chronically in short supply,” notes Leonardo Alencar, analyst at XP Investimentos.

Brazil had its second-best soybean harvest this year, and “there are still some left in silos, forcing farmers to store their corn in the open.”

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The country also needs to improve its efficiency in terms of transport, but João Pedro Lopes of freight market analysis firm StoneX notes “investments in infrastructure to improve roads and expand ports”.

Improvements in export corridors to ports in the north of the country have significantly “halved the distance to travel to winter corn from central Brazil,” where the state of Mato Grosso is located, which “reduces transportation costs,” asserts Andre Bessa, head of consulting firm AgroConsult.