Brazil’s growing season and ample rainfall, give them an edge up in the ag industry; and according to Darren Hudson, agriculture and applied economics professor at Texas Tech University, we better start thinking about Brazil as being the breadbasket of the world.
“The U.S. is no longer the leading agricultural producer on the planet. It is Brazil, and it is going to be Brazil in the foreseeable future,” he said.
Hudson presented at the International Trade Conference at the 2023 Mid-South Farm and Gin Show. He said that while Brazil is taking the lead, it does not mean the U.S. has lost its competitive position.
We still have a place in the market to be very profitable. However, he cautioned that the U.S. should think strategically about all our markets, and when it comes to cotton, Brazil is gaining speed.
“20 years ago, Brazil produced approximately three million bales of cotton. About 10 years later, that turned to seven and a half million bales. Today in 2023, we very well could see a year where Brazil produces more cotton than the U.S.,” Hudson said.
What paved the way? For starters, most Brazilian farmers have the capacity to double crop. Their soybean crop is followed by a second crop – the safrinha crop – of either corn or cotton.
Safrinha is Portuguese for “little harvest,” but make no mistake, there is nothing “little” when it comes to cotton production in Brazil. Annual rainfall averages 78 inches. The dryland, rain-fed crop produces approximately 4.5 bales of cotton per acre, and this level of production makes them highly competitive.
“If farmers in Brazil went to just a corn and cotton rotation on all the remaining acres for their second crop, they could theoretically produce 40 million bales of cotton annually. That is nearly four times U.S. production,” Hudson explained, as he echoed projections made by Joe Nicosia, executive vice-president of Louis Dreyfus Company.
Brazil also owns a good spot in the marketplace for acceptability. Their cotton is machine picked, graded, and contamination free.
Hudson added that when U.S. exports to China dropped off during the trade war, Brazil exports skyrocketed and have not come down since.
“China got used to buying Brazilian cotton and they got the supply chain set up with their contacts. While China is back to being the largest consumer of U.S. cotton, they are also buying cotton from Brazil. We were once the primary supplier to China, but that is not the case anymore,” he said.
Years of segmented growth and infrastructure are ahead, but Nicosia noted that Brazil is not stopping. He said this momentum sets the stage for Brazil to pass the U.S. in cotton production within the next three to five years as the largest exporter in the world.