South American Real Estate News

A second crop (corn) helps Brazil achieve a harvest of 271 million tons, and targets 300 million tons in a near future

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Brazil is forecasted to break another crop record in 2022 with the largest grain harvest in history, particularly because of the second crop of corn in Brazil, or safrinha. Previously considered merely a way to keep the soil in use between two important harvests, corn’s second crop gained importance as production became more sophisticated with the aid of technology.

Squeezed between the summer harvest and the winter off-season, Brazil’s safrinha should provide 87.4 million tons, 44% more than the previous crop, according to the Brazilian National Supply Company (Conab). This year’s result is likely to be the largest in the history of the country, proving that corn’s second crop is no longer second in importance, hence the fact that the soil it occupies and the output it will produce will be greater than those seen during the summer harvest.

Analysts believe that the growth in importance of the safrinha crop is an opportunity for Brazil to double its corn production in the coming years and move closer to world-class producers such as the United States and China. In addition to having enough space to increase grain production, the basis of Brazilian animal protein production as feed, the country also started employing corn to make ethanol.

This year, Brazil will produce 114.7 million tons of corn, a 31.7% jump compared to the previous harvest season. With this, the country should witness another record grain harvest, with 271.4 million tons, a growth of 6.2%, or 15.9 million tons, compared to the previous crop.

Corn yields could have been even greater had it not been for the 15.3% drop in production in the southern region of Brazil earlier in the year due to lack of rain.

“We have a lot of room to grow, both in terms of acreage and productivity,” says André Pessoa, CEO of Agroconsult. He recalls that it took Brazil 15 years to increase grain production from 100 million to 200 million tons, but achieving 300 million will take less time.

Pessoa recalls the expansion of the second corn crop as a Brazilian competitive advantage, noting that it already accounts for about half of the area of traditional summer grain farming. Moreover, the second crop of maize occupied an additional 1.64 million hectares this year alone, thanks to a scenario encouraged by favourable prices in domestic and foreign markets, as well as the anticipated soybean planting.

The earlier the soybean harvest, the better the “window” for planting second-season maize, keeping it from moving into the coldest and driest time of year.

The production of ethanol with corn, a new option for the commodity in Brazil, should consume 10.3 million tons, up 30% compared to 2021, according to the National Corn Ethanol Union (Unem).

“Corn ethanol has established itself as an alternative for verticalizing corn production, adding value and, since the last harvest, as an important equalizer in the fuel market,” said Unem CEO Guilherme Nolasco.

Currently, 17 corn ethanol plants are in operation, 10 in Mato Grosso, 5 in Goiás, 1 in Paraná, and 1 in São Paulo. Processing plants already on the market have been expanding their production since last year. Furthermore, at least two new units, one of which will be located in Dourados, Mato Grosso do Sul, should begin operations this year.

Contact the Gateway to South America team to learn about the best investment opportunities in the region. The company is a benchmark for foreign investors wishing to invest in Argentina, Brazil, Chile, Paraguay, Peru and Uruguay, providing expert advice on property acquisition and investment tours.

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Post available in: English

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