Aug 11, 2022

Brazil 2022/23 Soybean Production - 151.0 Million Tons

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

After a relatively disappointing 2021/22 growing season, Brazilian producers are anticipating a hefty rebound in soybean production in 2022/23. The USDA is estimating the 2022/23 Brazil soybean production at 149 million tons, but some private estimates have it as high as 152.6 million tons. In 2021/22, the Brazilian soybean production was in the range of 126.0 million tons. If the USDA estimate is realized, it would represent an increase of 23 million tons or 18.2% compared to last year.

My current estimate for the 2022/23 Brazilian soybean production is 151.0 million tons. The last two big soybean production years in Brazil were 2020/21 when they produced 139.5 million tons and 2019/20 when they produced 128.5 million tons.

In 2021/22, Brazil planted 41.0 million hectares of soybeans (101.2 million acres) and I am estimating that it will increase 3% to 42.25 million hectares (104.3 million acres). If realized, it would be the 16th year in row that the Brazilian soybean acreage has increased. The USDA is estimating that the acreage will increase 2.4% to 42.0 million hectares (103.7 million acres). Over the past five years, the Brazilian soybean acreage has increased 20%.

In years past, most of the acreage increase was due to additional land being cleared, but that has changed in recent years. The acreage increase now is mainly due to the conversion of degraded pastures to row crop production primarily across central Brazil, switching some of the first crop corn acreage to soybeans in southern Brazil, the conversion of some sugarcane acreage to soybean production, and the clearing of new land primarily in northeastern Brazil.

Will Brazilian farmers have enough fertilizers? The answer is yes. Recent fertilizer imports have been running greater than average including record volumes of fertilizers imported from Canada. Brazil has also negotiated with Russia to maintain a steady flow of fertilizers from its number one supplier. Shortly after the war broke out between Russia and Ukraine, there was a concern that fertilizer shipments from Russia and Belarus, two of Brazil's largest suppliers, would be disrupted, but those fears have now been eased.

Will there be enough financial resources available? - The answer is yes. The amount of resources available in Brazil's "Harvest Plan 2022/23" was increased by 36% to R$ 340.8 billion. Interest rates on production loans can be as high as 12%, but ample resources are available. Production cost will be higher in 2022/23, but Brazilian farmers are generally well capitalized.

What about prices, are they an incentive for Brazilian farmers? Prices are not as attractive as they were last growing season, but they are still high enough to guarantee a profit for most farmers. Farmers are concerned about the high cost of inputs, but input prices have been declining in recent months.

Will Brazilian soybean yields rebound in 2022/23? We always start off the season assuming trend line yields and soybean yields in Brazil are as good as or better than U.S. soybeans. The weather for the last two growing seasons has been less than optimum, but if the weather cooperates in 2022/23, it is possible Brazil could set record high soybean yields.

Could La Nina impact Brazilian soybean production in 2022/23? One concern is the continued presence of La Nina for the third consecutive planting season in Brazil. La Nina can result in a dry and delayed start to soybean planting in Brazil, but soybeans are very forgiving, so a delayed planting does not necessarily translate to lower yields. Late planted soybeans in Brazil can have acceptable yields if the weather during the remainder of the growing season cooperates.

Safrinha corn on the other hand, is not as forgiving. If the soybeans are planted late, then the safrinha corn will automatically be planted late since it is planted after the soybeans are harvested. There is a significant risk of lower safrinha corn yields if the corn is planted after the ideal planting window closes at the end of February.

When will soybean planting start in Brazil? Farmers in the state of Parana in southern Brazil are allowed to start planting soybeans on September 11th , so they could be the first soybeans planted in Brazil. Farmers in Mato Grosso are allowed to start planting soybeans on September 16th after the "Soybean Free" period ends on September 15th. Other states can have later starting dates depending on location.

Bottom line - Brazilian farmers are poised to increase their 2022/23 soybean acreage an estimated 3% and if the weather cooperates, the 2022/23 Brazilian soybean production could increase 23 to 26 million tons compared to 2021/22 or 18 to 20%.