Agriculture: The one bright spot for Brazil

Agriculture: The one bright spot for Brazil

Value-added exports, livestock are bright spots in an otherwise dismal economic outlook.

The longest day of your year was the shortest for Brazilians. Monday’s Solstice meant every day for the next six months will have a bit more light in South America as Brazilians deal with a presidential impeachment, a Zika virus threatening the upcoming Rio Olympics and an economy in the tank.

They’re likely looking to agriculture to provide a good part of whatever added sunlight they get.

In 2016, total grain production—with soy and corn representing the biggest chunk, is on a path to hit 210.7 million tonnes despite weird El Nino weather that knocked some second-crop corn planting out of the ideal window.

Brazilian Congressman Dilceu Sperafico: Looking forward to brighter days. (Photo: Courtesy

Soy planting was delayed by dry spells in several key production areas, bringing total projected 2015-16 soy production to 95.6 million tonnes, according to an agency of the Agriculture Ministry, down .6% from previous-cycle production. For example, estimated 2015-16 Mato Grosso soy yields ended up coming in at just 44.3 bushels per acre, versus an estimated 47.1 in 2014-15.

The national picture was a tad better, with an average of 44.5 bushels per acre in 2014-15, and 42.9 bushels per acre this time around.

Corn production took a hit as well, dropping from a two-crop total of 84.7 million tonnes, according to Conab, of 84.7 million tonnes in the previous cycle against 76.2 million this time around. Part of that was the need for soy-generated dollar-based income as the economy sagged, and the second crop was down partially due to the weather-related lateness of getting it in the ground. For more, see last week’s blog.

Value-added saves the day

Overall, though, the Gross Value of Agricultural Production in Brazil rose from 2% to 2.5% even while overall GDP fell by more than 3%, says Congressman Dilceu Sperafico of Parana, Brazil’s number-two soybean producer and top main-crop corn state.

Brazil is the world’s second-largest exporter of both corn and soy, but they’re likely to soon take back the world’s number-two spot in broiler exports as well.

Citing the national Census Bureau, Sperafico says Brazilian hog numbers should climb to above 40 million head this year, and that some 10.2 hogs were slaughtered in the first quarter of 2015, “with expectations that this performance will be even better in 2016.”

“In other words, poultry and pork production are the main stepping stones for… the economic, financial and social rebirth of the country.”

That’s a tall order, but when you’re facing the challenges Brazil’s going through right now, you look for each day to bring a few minutes’ more light, and you seek ways to optimize the one economic sector that seems to be bringing good news.

The opinions of the author are not necessarily those of Farm Futures or Penton Agriculture.

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