Brazil: excellent prospects for agribusiness and export in 2017

Brazil is getting ready for a blockbuster 2017 harvest and booming exports, amid favorable weather forecasts, according to recent estimates. With a plentiful harvest expected, Brazil’s National Grain Association predicts grain exports will rebound, with soybean exports of 60 MT in 2017, compared with some 51 MT for 2016. Corn exports will increase to 30 MT, compared with some 18.5 MT in 2016, the association reported.

Brazil’s crops are in very good condition across the country’s vast 4 million-square-kilometer cropland region. Dryness in southern Brazil’s Mato Grosso do Sul state and the western Bahia are “setbacks, that do not present irreversible loss of productivity”, according to reports by Globo Rural magazine. The magazine estimates that 77.6% of soybeans have been planted so far.

Meanwhile, the consultancy Agrural puts plantings at 83% complete, while Agroconsult estimates plantings at 85% complete, with a 1.4% increase in soybean acreage.

Brazil’s farm economy will rebound in 2017 with a record harvest pushing up grain exports and expanding the country’s livestock industry, according to analysts’ forecasts. An estimated record grain harvest of 213.1 million tons would be 14% larger than last year, when crops were devastated by drought, according to Brazil government estimates. The harvest will start in January.

 “Contrary to the Brazilian economy, agribusiness points to a positive performance in 2017 because of the improved agriculture revenue. We have relatively stable prices ahead … and we have increased grain production,“ the managing partner of MacroSector, Rabo Silveira said.

According to another Brazilian marketing firm, Safras & Mercado, Brazilian soybean production in 2016/17 could increase by 9.2% to 106.085 million tons, according to news reports. That would be roughly 4 million tons higher than USDA’s estimates.

In its largest supply and demand report Dec. 9, USDA raised Brazil’s estimated corn harvest 3 million tons to 86.3 million tons, but left soybean production unchanged from November at 102 million tons. USDA also left Argentina’s corn and soybean production unchanged, at 36.50 million tons and 57 million tons, respectively.

“Agribusiness has a very good scenario for a year in which the economy of the country will go sideways. It is not that agribusiness will be immune, but it has some rules of its own,” Silveira says.

Poultry producers project a production increase of 3 to 5%, and pork producers of 2%, according to the Brazilian Animal Protein Association, partly because of a larger projected supply of corn, a staple of animal feed.

However, despite increased crop production uncertainties about the exchange rate, the national economy and politics could negatively impact the farm economy, according to some agribusiness leaders.

“The most difficult factor for 2017 is the unpredictability,” said Cario Carvalho, the president of the Brazilian Agribusiness Association.

Sources: Globo Rural, Mercopress Agency