The agricultural giant of South America, Brazil, is altering the world corn market in ways that challenge the United States, the No. 1 grower and exporter, say USDA economists Ed Allen and Constanza Valdes. Brazil is now the second-largest corn exporter and its shipping season coincides with the U.S. harvest, which could mean lower market prices at the moment the U.S. crop cascades onto the market.
“U.S. corn exports can expect strong competition from Brazil from September through January,” says the Economic Research Service report. Growers usually sell half of their crop in that period so low prices could have a significant impact on farmers. U.S. sales would become more important during February-April, when Brazil has less corn to sell.
The competition in corn could redound to the advantage of soybean growers, says the ERS, because Brazil has a smaller presence in the world market from October-January, when U.S. growers sell 62 percent of their beans. “Shifts in producer returns resulting from these relative price changes would contribute to further adjustments in U.S. acreage from corn to soybeans.” Double-cropping is common in Brazil with corn following soybeans. Corn is the second-largest crop in Brazil in terms of plantings, the opposite of U.S. practices.