Over the past decade, the U.S. has faced increased competition from South American exports. Its competition has permanently affected the way American traders perceive **.
A common denominator in crop market analysis is the situation in South America, where crop yields continue to increase, particularly in Brazil and Argentina.
South America, and Brazil in particular, has seen a significant increase in production," said Don Roose, president of Des Moines U.S. Merchandise. "I think the last time there was a big drought like this was in 2012, and Brazil produced about 55 million tons (of corn). This year, their income has more than doubled. The same goes for beans. ”
Since the drought of 2012, Brazil has established itself as a major producer and exporter, Ross said.
This summer, Monte Shaw, executive director of the Iowa Renewable Fuels Association, said he expects Brazil to add 40 million acres of corn acreage by the end of the decade, as the region is also expected to become a larger player in the ethanol market.
Brazil is producing more ethanol, more distiller's grains, or, you know, raising more cattle and corn," Shaw said. "All these things can be stressful for us. ”
Export data shows Brazil's impact on U.S. agriculture, particularly in the late 2010s. After the United States launched the ** war in 2018, China's demand for South America gradually increased. And U.S. corn exports have also improved after increased demand from China, while Brazil has been boosted by its ability to grow a second crop of corn, leading to increased growth and increased competition. As a result of these factors, the South American country has overtaken the United States to become the largest exporter of corn.
Gary Schnitki, a professor at the University of Illinois College of Agriculture and Consumer Economics, said: "Although U.S. corn production and exports are at historical averages, the U.S. is likely to compete with Brazil for the world's largest corn exporter in the coming years. Wrote in a farm docs article in early 2023. "Brazil is expected to surpass the United States in corn acreage in the coming years. ”
Despite the increase in acreage, the article says that the United States is still the king of yields. Brazil's average yield for the 2022-23 season is expected to be 90 bushels per acre, up nearly 58% from 15 years ago. That's about half the U.S. average for 2022.
Although the average yield of corn in Brazil has increased in the past few years, it is still far from the average corn yield in the United States," he said. "Even so, Brazil's leading position in corn exports may not be temporary. ”
Soybeans also faced stiff competition from South America and were one of the hardest hit commodities during the war. As with corn, export demand has recovered, but the South American crop has gained a foothold.