Some of the commodities where they have become the world’s leading producer or close to it include: soybeans, oranges, sugar, coffee and corn. Brazil has a way to go to improve their infrastructure to transport their commodities within the country and for export. Transportation delays and strikes are common in Brazil, but they are a major player in the export markets.
Improvements are being made every year in Brazil when it comes to agriculture production. The days of a third world country where they are using second hand equipment are a thing of the past. Brazil’s farmers are equipped with the latest models of tractors and they utilize the latest in technology.
John Deere and other farm equipment manufacturers are opening dealerships throughout Brazil. Many people might be surprised to see a shiny new $300,000 John Deere tractor harvesting crops in Brazil. Production will likely continue to increase in the coming years as they are utilizing all resources to increase yields and production.
As might be expected with a boom in agriculture, farmland prices has soared in Brazil. George Soros and other large hedge funds managers have been buying agriculture land in Brazil in large tracts. The Brazilian government didn’t like the large trend in ownership from foreign investors, so they put restrictions on foreigner sales in 2012. Nonetheless, land prices could continue to increase in the coming years.
Some people in the U.S. might feel threatened that Brazil has become such a presence in the agriculture world, but the world would be in a much worse situation without them. It is hard to imagine where the prices of soybeans, coffee, corn and sugar would be without Brazil. The world would be running severe shortages and prices would be extraordinarily high without the advancements in Brazil.
Brazil is the leading producer in arabica coffee beans. The Arabica beans are higher quality than the robusta version where Vietnam is the leading producer. They continue to expand their acreage and production. They do have to worry about a freeze to their coffee crops about every five years on average. Outside of weather issues, Brazil will retain their dominance in coffee.
Florida has long been considered the world’s leader in production of oranges and orange juice. That title is long gone for Florida as Brazil has surpassed Florida in orange juice production. Florida has had to deal with hurricanes, freezes, dry soil and diseases in recent years that have had a major impact on crop production. Many orange juice products probably come from Brazil or they are a blend with Florida juice unless stated that the juice is only from Florida.
Soybean production in Brazil has been quite amazing, increasing about 500 percent from 1990 to 2011. They have become much more efficient at production as many American agriculture companies have gained a heavy influence in the country.
Monsanto, for example, has pushed their Round Up Ready soybeans on Brazilian farmers. They have traditionally been resistant to GMO agriculture, but the economics now have more than 90 percent of the soybeans planted in Brazil as GMO.
Brazilian soybeans are typically priced below U.S. soybeans and that often makes them more competitive on the export market. China is typically a big buyer of Brazilian soybeans. Their growing seasons are opposite of the U.S., so there is typically a balanced supply of soybeans on the market year round from the two countries.
Brazil is certainly a powerhouse in the world of commodities. They will probably only get stronger in the years ahead. They are competitive with the U.S. in many commodities, but the world is certainly fortunate that they are providing a large amount of commodities to feed the world.