Competition in world markets is expected to intensify as Brazil is currently projected to produce record corn and soybean crops for 2022-23.
Joana Colussi, postdoctoral research associate at the University of Illinois who serves on the farmdoc team there, reported crop production in her home country of Brazil could increase to record levels of 5.6 billion bushels of beans and 4.9 billion bushels of corn.
If realized, Brazilian corn output for 2022-23 would be up 12% from the previous year, with a portion of the additional bushels likely headed to the export market.
“The weather situation so far has been favorable conditions for most regions,” Colussi said at the Illinois Farm Economics Summit in Peoria. “There’s been moderate to severe drought in the south, but expectations so far are for good yields.”
In 2022, Brazil exported a record amount of corn, 44 million metric tons (mmt) or 1.73 billion bushels. And those sales could swell to 50 mmt (or 1.96 billion bushels) this year.
“China signed an agreement with Brazil to import corn. Those shipments started in November,” Colussi said.
If the pace of corn production and exports continues to grow in Brazil, could it possibly surpass the U.S. as the world’s top exporter? Colussi believes it’s possible.
“Brazil could surpass the U.S. in corn exports sometime between 2024 and 2026,” she said. “We’ll see. There are many factors at play.”
USDA’s November forecast pegged all U.S. ag exports at $190 billion for fiscal year 2023, down $3.5 billion from its August estimate.
Grain and feed exports are projected to decrease by $300 million to $46.2 billion in 2023. And, USDA reduced its estimate of U.S. corn exports by 150 million bushels to 1.92 billion as of Jan. 12, reflecting the slowest pace of sales since 2019-20.
Meanwhile, U.S. ag imports are projected to grow to $199 billion this year, driven by higher imports of horticultural products, sugar, tropical products and grain and feed.
“A strong dollar, while a headwind to the export forecast, is partially responsible for the higher import demand,” USDA noted.
However, there could be an opening for the U.S. to export more corn in the months ahead before Brazil harvests its second-crop corn, safrinha. That’s not the case with soybeans, though, as Brazilian beans should start hitting the market next month.
USDA lowered its soybean export forecast for the U.S. by 55 million bushels as of Jan. 12 to 2 billion bushels.
“The U.S. should have an opportunity to sell more corn before Brazil’s safrinha harvest in July,” Colussi said.
Double and triple-cropping adds about 66 million acres worth of crop production in Brazil each year.
Elsewhere, the crop outlook in Argentina isn’t as rosy. With 85% of corn and 90% of soybeans planted as of Jan. 5, the majority of beans (70%) went into the ground outside of the period to maximize yields due to weather-related planting delays.
“Drought conditions made it difficult to plant early,” Colussi said. “It’s a third consecutive La Nina year, which usually creates a hotter and drier summer in Argentina.”
And, the August through December timeframe the past three years there has been the driest in more than 30 years.
Crop output subsequently is projected to decline by 45% for wheat and 15% for corn in Argentina for 2022-23.
USDA’s latest estimates released Jan. 12 pegged the Argentine soy crop at 45.5 mmt, down 4 million from the previous estimate, while the Brazilian soy crop increased a million to 153 mmt.