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With innovation and technology, Brazil emerges as a dominant player in global agriculture
16 June 2021
The U.N. projects global population will reach 9.7 billion by
2050, a 35% increase from today. In order to support the growing
population, global agricultural output must double. As the world's
fifth-largest country and home to 22% of the planet's cultivable
land, Brazil will play a key role in the future of agriculture.
Over the past 40 years, Brazil transformed from being a food
importer to one of the world's top producers and exporters. Brazil
is now the largest producer and exporter of beef in the world. In
addition, it currently ranks first for global soy production and
exports, and chicken exports. Other main crops and livestock in
Brazil include cotton, corn, pork, milk, sugarcane and coffee.
Production explodes due to improvements in Brazil's
agriculture technology and farming efficiency
Brazil achieved a significant production increase with a minimal
increase in agricultural area. Research and innovation made this
possible. Seed technology, crop rotation, double cropping, cutting
edge machinery and precision agriculture improve output and
efficiency. Brazilian farmers also use crop protection and
fertilizer to maintain high outputs. Investment in tropical
agricultural research and agritech is strong, suggesting that
Brazil's production and efficiency will continue to grow in the
coming years.
Increases in agricultural production and exports positioned
Brazil to become a major player in the global market. In 2013,
Brazil overtook the U.S. as the world's top soybean exporter.
Soybean prices in the U.S. have reached record lows, while soybeans
sold for the Brazilian reais are approaching record highs.
Competition has shifted from the Northern Hemisphere to the
Southern Hemisphere, a trend that will likely continue.
Agribusiness accounted for 21.4% of Brazil's GDP and 19.5% of
its jobs in 2020. According to data from the World Bank, the GDP
grew 9.11% over the past 40 years, with an average annual growth
rate of nearly 5% since 1995. GDP growth has contributed to poverty
and hunger reduction and improved quality of life for Brazilians.
Agricultural exports positively impact Brazil's trade balance,
offsetting deficits in other economic sectors and providing an
influx of foreign currency (OECD-FAO Agricultural Outlook, 2015).
Additionally, the agricultural boom has a positive effect on
farming and livestock land prices. Prices typically increase in
times of favorable food commodity prices and remain stable during
lower commodity price periods.
Growing appetite for meat boost's agriculture demand and
increases GDP
Growing demand for meat and dairy is another driver of the
Brazilian agribusiness sector. Global consumption of beef, pork,
poultry and sheep was nearly 325 million tonnes in 2020 and is
projected to increase 12% by 2029 (OECD). This will fuel demand
across the agribusiness sector, as crops like corn and grain are
required to feed livestock. Brazil has ample supplies of corn and
soybean meal for livestock feed, available for both domestic use
and foreign exports. The country is the world's third largest corn
producer and exporter. Still, more than 60% of Brazil's corn
consumption goes to domestic poultry and hog farming. Brazil is
well-positioned to maintain and increase meat production in
response to a growing GDP and meat demand.
Thriving export market expands during Covid-19
pandemic
In 2020, the gross valuation of Brazil's agribusiness sector
reached $126 billion . Despite economic effects from the COVID-19
pandemic, Brazil remained an agricultural exporter. There is strong
potential for the country to expand its participation in the market
in the coming years. Brazil has the weather, land and technology
necessary for a thriving agribusiness sector. It is well-positioned
to withstand changing competition in the marketplace and projected
population global growth.
Market dynamics are rapidly evolving in response to Brazil's
growing agricultural dominance. IHS Markit provides the most
up-to-date information on Brazil's agriculture statistics including
prices and analyses on Brazilian crop, livestock and land markets.
Specific data includes:
Cash prices
Import and export volumes
Production costs
Profit margins
Land valuation
Freight rates
Processing margins
And more
Our purpose-built data and analysis platform is specifically
dedicated to Brazilian agriculture and the unique economic signals
of that market. To learn about information contained in the
platform and how you can use it to help make investment decisions,
download our new Brazil
Food and Commodities Economics white paper now.
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