Brazil is one of the world’s largest producers of agricultural and food products, leading the world in oilseeds production, for example. However, its low wheat production makes its flour milling industry dependent on imports, a situation the country’s millers want to see change.

The International Grains Council (IGC), in its May 27 Grain Market Report, forecast total Brazilian grains production in 2021-22 at 128.4 million tonnes, up from an estimate of 128.3 million the previous month and from the previous year’s total crop of 108.9 million tonnes.

It put the country’s wheat crop at 6.9 million tonnes, 200,000 above the previous forecast and up from 6.2 million in 2020-21. The forecast for Brazil’s corn crop is an unrevised 117.4 million tonnes, up from 98.5 million the year before. Sorghum production is forecast at 2.6 million tonnes, revised up from 2.5 million, but down from 2.8 million the previous year.

Brazil’s total 2021-22 grains exports are now forecast at 32.8 million tonnes, revised down from the previous estimate of 37.7 million, and down from 36.6 million the previous year. Its grain imports are put at an unrevised 8.6 million tonnes, down from 9.9 million in 2020-21. Of that, wheat imports are forecast at 6.7 million tonnes, which is unrevised from the IGC’s previous estimate and unchanged from the previous year.

Total corn exports are put at 32.1 million tonnes, down from a previous estimate of 37 million tonnes. Corn exports in 2020-21 were 35.4 million tonnes. Brazil is forecast to import 1.4 million tonnes of corn, an unrevised figure that compared with the previous year’s 2.6 million. The IGC said Brazil also will import 500,000 tonnes, an unrevised forecast, down from 600,000 tonnes the previous year.

Brazil is the biggest soybean producer in the world with a crop forecast by the IGC at 140.5 million tonnes, compared with its previous figure of 139 million and the previous year’s 134.5 million. It is also the world’s biggest soybean exporter, with exports forecast at 91.4 million tonnes in 2021-22, up from a previous forecast of 87.4 million tonnes and from the previous year’s 86.1 million. It will import 400,000 tonnes, a figure revised up by the IGC from 100,000. The previous year’s soybean imports were 400,000 tonnes.

Strong demand for corn

In an annual report on the grains sector published on April 1, 2020, the USDA attaché in Brazil forecast that corn prices would remain high at least until the end of 2021, on the basis of strong external and internal demand.

“As has been the case this year, Brazilian producers should be incentivized in 2021-22 to expand corn planting, especially in the Center-West,” the report said. “Factoring in trend yields, Brazil could easily smash its corn production record.”

Corn is grown in every state of Brazil and given the large size of the country and its geographic diversity, corn is also planted and harvested during several different periods, the attaché explained.

“The corn crop in southern Brazil is typically planted between September and December and then harvested between January and May,” it said. “This crop is now considered the first of three annual corn crops, as it is the first to be harvested during the market year. It is also known as “full season” or summer corn, given that it is normally the only crop planted in a particular field during the year and also is largely cultivated during the Southern Hemisphere’s summer season.”

First-crop corn accounts for 25% of Brazil’s total production, it said.

“As agricultural production expanded into the Center-West region starting in the 1970s and 1980s, Brazilian farmers began planting two crops per year on the same land, as the warm growing climate and length of the rainy season would usually support cultivation of soybeans during the summer followed by corn on the same area in the Southern Hemisphere autumn and winter,” the attaché said. “This corn crop is known as second-crop or winter corn, but is also referred to as the ‘safrinha,’ the Portuguese term meaning ‘little harvest,’ because it was originally the smaller of Brazil’s two corn crops. Today, safrinha corn makes up almost three-fourths of total corn production in Brazil. Safrinha corn is typically sown between January and March and harvested between June and September.”

Corn ethanol industry growing

In an October 2020 report, the attaché noted a boom in corn-based ethanol, in a country in which biofuel production traditionally has focused on using sugarcane.

“Plentiful, and generally cheap, corn supplies in Brazil’s Center-West region have enticed investment in the corn ethanol sector over the last few years,” the report said. “The Brazilian Corn Ethanol Union (UNEM) estimates that the sector will produce about 2.5 billion liters of corn-based ethanol in market year 2020-21.”

There are 16 corn ethanol plants in the country, four of which are corn only, with the rest equipped to use corn or cane. According to the attaché, industry sources report at least seven other corn-based ethanol plants in the planning, development, or construction stage, which could come online in the next two years.

“If all the ongoing projects are built as planned, Brazil’s corn ethanol production could top 5.5 billion liters per year, consuming more than 13 million tonnes of corn annually,” the report said.

In the annual report on the grains sector, the attaché — predicting a record 7.05-million-tonne wheat crop in 2021-22 — said that “historically high domestic wheat prices are pushing farmers to dramatically expand wheat cultivation.”

“Brazilian wheat production is concentrated in the south of the country, especially in the states of Parana and Rio Grande do Sul,” the report said. “Together, those two states account for roughly 85% of total Brazilian production. Even with a bumper crop in 2021-22, Brazil will remain one of the world’s largest importers of wheat. The crop is one of the few commodities for which the country is not self-sufficient.”

Millers want more domestic wheat

The report notes that the Brazilian Wheat Millers’ Association (Abitrigo) is continuing to push the Brazilian government to adopt the group’s “National Wheat Policy,” which, among other things, aims to dramatically increase wheat cultivation in Brazil.

“According to Abitrigo, failing to achieve self-sufficiency in wheat production leaves Brazil vulnerable to the whims of exporting countries that could place limitations on foreign sales of wheat, as has been the case with Russia this year,” the report said. “There are also persistent rumors that Brazil’s largest wheat supplier, Argentina, could do something similar, which could jeopardize sales channels for Brazilian millers.”

Abitrigo puts the number of flour mills in operation in Brazil in February 2019 at 165. It estimates the total amount of wheat milled in 2020 at 12.7 million tonnes.

“Per-capita consumption of wheat in Brazil has slumped in recent years but has been offset by population growth, leaving the overall wheat consumption level relatively static,” the attaché said.

Brazil is a key global oilseed producer, accounting for almost a quarter of total global supply, the attaché said in a separate report on the oilseeds sector, published on April 1.

“Globally, Brazil is the leading producer and exporter of soybeans, accounting for more than one-third of the world’s soybean production,” the attaché said.

Strong demand, high prices, and a favorable exchange rate have contributed to a continuing expansion in area and production, with the attaché forecasting an area of 40 million hectares in 2021-22, up from 38.5 million the year before.

Brazil has adopted biotech crops on a large scale, becoming the world’s second largest producer with 104 events approved, according to a December 2020 attaché report.

“The total area planted to GE crops reached over 53 million hectares during the recently completed crop year of 2019-20,” the attaché said.