Brazil's soybean production to reach record levels

The U.S. Department of Agriculture Foreign Agricultural Service (FAS) announced on April 9 that Brazil will reach a record soybean production in 2009-10 of 67.25 million tonnes on 23.2 million hectares and record exports at 28.5 million tonnes.

National yields reached a record 2.9 tonnes per hectare supported by favorable El Nino weather and record yields in southern Brazil. However, potentially higher yields were not reached due to high humidity, reduced sunlight and increased disease and pest pressures.

FAS forecasts a return to historical record area planted in 2010-11 at 23.3 million hectares producing a record 67.5 million tonnes. Soybeans maintain a lower relative production cost and greater liquidity compared to alternative crops.

High transportation costs continue to significantly affect producers’ profitability with scheduled infrastructure improvements still outpaced by potential growth in production. The majority of soybeans are still transported to market and/or export via roadway, with slow progress being made in multimodal transport systems. The record 2009-10 harvest has seen truck rates increase 25% to 50% as demand outstripped supply, accounting for 50% of the value of soybeans in the Center-West region.

Exports in 2010-11 are expected to remain strong and are forecasted at 28.75 million tonnes, according to FAS. Domestic demand for soybean oil is projected to increase 100,000 milllion tonnes annually based on Brazil’s current 5% biodiesel blend mandate.

Soybeans remain the primary oilseed produced in Brazil with nearly 50% of 2009-10 production destined for processing. Brazil maintains ample processing capacity at 54.5 million tonnes in 2009-10, a 7.4% increase over last year. The inauguration of new high-capacity crushing plants in the Center-West region brought Brazil’s 2009-10 crushing capacity to over 165,000 tonnes per day. Twenty-five percent of plants possess a processing capacity over 3,000 tonnes per day and nearly 50% of plants operate with 1,500 to 3,000 tonnes per day capacity.

Source: World-Grain.com