USDA Analysts Report on Brazil

March 13, 2001

USDA analysts recently completed a tour of the "agricultural expansion areas" of Brazil, finding generally healthy soybean, corn and cotton crops and a "robust expansion" of cultivated land. Crop area expansion in northeast and center-west Brazil continues with soybeans the dominant crop.

In the three agricultural areas visited -- Western Bahia, Southern Maranhao and Mato Grosso – fields of recently torn up brush and knocked down trees were observed as land clearing continues. It was reported that recent increases in diesel prices were having a negative impact on land clearing operations. With higher diesel prices it becomes more expensive to do the multiple heavy discings and to transport the five tons per hectare of lime required to prepare native Cerrado land for planting soybeans or other cultivated crops.

Large receiving stations for soybeans with quonset hut-shaped flat storage units rise above the Cerrados along the few paved roads in western Bahia, southern Maranhao, and Mato Grosso. New investments were especially evident along highway BR163 going north from the capital Cuiaba. The larger towns of Lucas, Sorriso, and Sinop all had construction projects underway where large new flat storage units were being built by grain trading companies and cooperatives.

A surprising amount of corn was being grown, the analysts reported. In western Bahia and southern Maranhao, corn is marketed to the livestock industry in northeastern Brazil. In southeastern Mato Grosso, a growing hog and poultry industry is consuming much of the corn.

Cotton production has expanded rapidly this season and is becoming more broadly distributed geographically in northeastern and center-west Brazil. In the irrigation district in western Bahia where total crop land is about 300,000 hectares, 53.2% of the crop land is in soybeans, 15.1% corn, 15.5% in cotton, 5.8% in coffee, 4.6% in fruit crops, 2.1% in edible dry beans, 1.8% in rice 1.9% in other crops. Officials of the local growers association expect that in the next three years, total crop area will increase, but proportionally, soybean area will decline, cotton will increase, and coffee area will double.