Tips to understand Brazil’s soybean production

By Daniele Siqueira, AgRural Commodities Agrícolas 

The record area of 43.2 million hectares that Brazil is likely to cultivate with soybeans in the 2022-23 crop was 91% planted by Dec. 1, compared with 94% in the same period last year and in line with the 5-year average, according to AgRural data. Production, based for now on trendline yields, is seen at 150.5 million metric tons, 25 million up from last season, when a severe drought linked to the phenomenon La Niña resulted in historical losses in southern states.

AgRural will replace trendlines by actual yield estimates by state later this month. So far, the new crop develops well, but rains have been spotty in some regions, and farmers in central states, including top producer Mato Grosso, are concerned about dry spots that are now heading into the pod-filling stage. Hit-and-miss rains have also been seen in southern states, but the situation is far from being as bad as the one faced a year ago.

As we wait for the 2022-23 crop to unwrap, I have gathered four tips to help understand what is important to have in mind during the Brazilian crop season.

1. Brazil is a huge country and there are big regional differences

Unlike the U.S., Brazil doesn’t have a “soybean belt.” The planted area extends from the extreme north of the country, in Roraima, to the extreme south, in Rio Grande do Sul, and from the extreme west, in Rondônia, to Piauí, in the Northeast. That results in big differences in terms of crop calendar, climate and soil. In the south of Rio Grande do Sul, for example, soybeans have advanced over rice areas and can be irrigated, as the region usually has hot and dry periods during the pod-filling stage, in January and February. In Roraima, farmers plant their crop in April, May and June, when other states have already finished harvesting.

2. The soybean area major increases are not in the Amazon

Brazil’s soybean area jumped by 15.5 million hectares, or 56%, over the past 10 years. For those who are unfamiliar with Brazilian agriculture, this data may bring to their minds many sensationalist headlines that trumpet soybeans as the great villain of deforestation in the Amazon rainforest. That is not true.

In absolute numbers, the state where the soybean area grew the most during the period was Mato Grosso, with 3.9 million hectares. Mato Grosso is within the so-called “Amazon Biome,” but most of the state is covered by savanna vegetation (“Cerrado Biome”). In this case, producers are allowed to legally deforest 35% of the property’s area for planting. Most of the advance in recent years, however, has taken place over degraded pasture areas rather than newly cleared areas.

The second state where the soybean area increased the most (1.9 million hectares in 10 years) is Rio Grande do Sul, which is 2,600 kilometres from the “Amazon Biome.”

3. La Niña impacts the south and doesn’t necessarily result in crop failure

After experiencing a historic crop failure in 2021-22 (drought-related losses exceeded 20 million metric tons), Brazil is under the threat of a third consecutive La Niña. The phenomenon usually exacerbates hot and dry periods that normally occur in the southern portion of South America between December and February, when soybeans are in reproductive stages.

La Niña, however, is not an unmistakable cause of crop failure, as it doesn’t act alone in determining the volume of rainfall in southern South America. So much so that there have been La Niña years when yields were very good. In addition, La Niña doesn’t usually reduce productivity in other soybean growing regions in Brazil.

4. Too much rain in Mato Grosso is normal, even during harvest

In Mato Grosso, the year has basically two seasons: the dry season (April to September) and the wet season (October to March). In Sorriso, northern Mato Grosso, for example, the average annual rainfall reaches 1,829 mm. Of this total, 1633 mm (89%) fall between October and March. That’s why it’s necessary to be careful when evaluating precipitation anomaly maps for the state.

There are years, for example, when rains in December, during the pod-filling stage, don’t reach the 310 mm considered normal for the month, and that is shown on anomaly maps as “below average.” That doesn’t mean, however, that the rains were insufficient to guarantee excellent conditions for the soybean crop.

In addition, it is normal to rain a lot in January, when the soybean harvest begins in Mato Grosso. Therefore, grain quality problems, harvest delays and logistical challenges happen very often. Those kinds of issues are good for headlines, but they are normal problems that farmers and other links in the production and export chain know how to manage.