Brazil is rapidly moving to overtake the United States in soybean production and become a major competitor on world markets, according to an Iowa State University grain markets expert.
Chad Hart, an Iowa State University Extension and Outreach grain markets specialist and associate professor of economics, said a combination of long-term trends and recent weather patterns are responsible for putting Brazil in a position to overtake the United States for the first time.
"This has been building over a long period of time, but this year will be a milestone,” Hart said. "The United States has been the dominant producer of corn and soybeans for quite some time.
"For Brazil to ramp up dramatically and catch us, it shows the changing global conditions behind the crop markets."
Hart said the 2012 drought that withered much of the prime U.S. farmland hastened Brazil’s ascent among the world’s top soybean producers. He expects the next few years to bring competitive soybean crops between the United States and Brazil, but doubts this country will return to its previous dominance of the market.
Hart said U.S. farmers won’t be able to keep up with the rate at which Brazilian producers are expanding the acres devoted to soybeans.
"The Brazilians will continue to build on their production base, while we’ve run out of room," Hart said. "About all the land we can devote to crop production is pretty much in already."
Although Brazil may supplant the United States as the largest producer of soybeans, Hart said the crop will continue to turn a profit for U.S. farmers.
A U.S. Department of Agriculture report released on Friday predicted an average price of $14.30 per bushel for U.S. soybeans in 2013. That would be a record if the forecast holds true.
While Brazil may take the lead in soybeans, Hart said U.S. dominance of the corn production market is not endangered."While Brazil can catch the United States in soybeans, they’re still a long way behind in corn production," Hart said. "Brazil and Argentina combined would only produce a third of what we produce in the U.S."