There is 'no food crisis' as Brazilian farmers hit record yields

“We do not have a food crisis,” Pedro Dejneka told the attendance at the Barnett Hall conference. The Brazilian referred to media headlines about food shortages and said: “Please stop with the madness – what we have is a problem with distribution, not of production.”

Pedro consults with customers in the agricultural industry in Brazil. His company, MD Commodities, cover 10m acres of corn, soybeans and cotton.

In January to April of this year, Brazilian agriculture harvested approximately 157m tonnes of soybeans – a record.

It was 20m tonnes above the past record just two years previously. Corn hit 137m tonnes this year in Brazil, and could easily get to 200m tonnes of soybeans and over 155m tonnes of corn by 2030.

“We are not running out of food. Not even close,” Pedro commented.

You can see why he says that there is no food crisis. Most people will now start to think “but that increase in production is coming from land which has been deforested”.

Yet a slide which appears on-screen does not demonstrate this.

The slide shows that just 8% of Brazilian land is dedicated to crop production; 22% is dedicated to grassland, and most of the new crop land for corn and soybeans is coming from pasture.

Pedro proclaims that deforestation happens and “it stinks”, but he said agriculture is not the main culprit, and calls on the audience to look at their desks and their furniture. He says to look for forests in corn- and soybean-producing states in the US.

He then adds that farms, which are now mostly corporations in Brazil, have a legal obligation to keep 30% of their land as native land planted to trees. If you cut down more trees than that, Pedro comments that you have major problems.

It sounds quite similar to rules that Irish farmers have to comply with – 10% under space for nature in the Eco-Schemes, for instance.

Farms have water reservoirs to have water when it is needed for sustainable use. Pedro commented: “The growth is sustainable. The narratives that are out there are trying to sell you a problem that doesn’t exist. You’re looking at the wrong sector if you’re looking at agriculture.”

Profits and margins

So, while there are rules, like keeping 30% native land on farms, in Brazil these farms do not receive subsidies.

Their neighbours in Argentina and further north in the US are big producers of corn and soybeans as well, but these farmers are subsidised. So, how are Brazilian farmers producing crops without subsidies?

Pedro explained that the Brazilian farmer very commonly looks at 30, 40 and 50% margins on corn. In a bad year, margins would be about 10% to 15%. That’s for one of the crops. The majority of the country can plant two crops in the season in Brazil.

So, how are Brazilian farmers producing crops without subsidies?

Safrinha corn is the second crop. Safrinha means “little corn crop”, Pedro notes. However, it is not a very little crop. The Safrinha maize crop is now responsible for over 70% of Brazilian corn production.

He explained that he walks into fields now producing 200bu/ac, but 30 years ago, people would have said these fields could not produce these types of crop yields.

Cotton is also becoming a big crop in Brazil. It gives a lot more money to farmers, Pedro explains. Margins are lower, but the numbers are higher.

“A lot of the large producers in Brazil are going big on cotton. They use the soybeans as a cover crop almost,” he added.

Pedro commented that “Brazil listens to the market” and that as long as the economics of growing these crops stack up, then production will increase in the near term. He said the investment is there.

An example of this investment is the money that goes into the transport infrastructure.

Logistics

Pedro showed a map of 36 main public ports, 15 of which are used mainly for corn and soybeans. He commented that the Northern Arc has changed the game, as it is saving on costs and making it easier for commodities to be moved.

“A lot of the production in Brazil is happening in the middle of the Amazon. Mato Grosso produces more soybeans than Illinois, Iowa and half of Minnesota combined,” Pedro noted.

Soybeans once had to be transported from Mato Grosso to the south and this was awkward. Now, these soybeans can go on the river, and time and costs are saved.

The Northern Arc’s share of exports has risen massively in recent years to 37%. Almost 40% of Brazil’s soybeans go through the arc, according to the commodities expert, which he says has changed things dramatically in the last five years.

However, Brazil still does not have enough storage for its produce. That’s why you see pictures of piles of corn, he explained. Exports are hugely important.

In October, the consultant estimates Brazilian soybean exports will hit 5.5m tonnes. The country has soybeans left over this season, and so has plenty of soybeans to sell during a key window for US soybean exports, which is in September to March.

“When the world wants to buy something, they look to Brazil and Argentina,” he said. At current growth, this looks like it will continue.

The scale and investment in crop production in Brazil is amazing. It is becoming a superpower. Interestingly the things we hear so much about here in Ireland did not come up in Pedro’s presentation: carbon emissions and footprints.

Carbon footprint

The carbon footprint of Brazilian corn sits somewhere around 1,339kg of carbon dioxide equivalents per tonne (CO2eq/t) of corn produced, according to the Global Feed Lifecycle Assessment Institute’s (GFLI) database, Rachel Connor from Barnett Hall told the room.

This compares with 296kg CO2eq /t for US corn. Brazilian soybeans produce 4,484kg CO2eq/t of soybeans produced compared to 429kg CO2eq/t in the US. The difference, she explained, is land use change and deforestation.

On a global scale, massive production seen in Brazil is needed to supply food to the world and keep food prices down.

We need the Government and Teagasc to work on a carbon footprint for Irish grain. At present, GFLI figures for Ireland are based off the UK’s figures

Ireland will not compete with Brazil on the margins mentioned above, so surely our selling point needs to be our more niche products for consumers who want low-carbon and environmentally sustainable food.

At present, most Irish wheat and barley goes into the same ration as the Brazilian corn or soybeans. Surely, it should be targeted at a smaller number of animals to have an Irish-fed animal producing meat or milk with added value?

Irish grain

We need the Government and Teagasc to work on a carbon footprint for Irish grain. At present, the Irish Farmers Journal understands that the GFLI figures for Ireland are based off the UK’s figures – except slightly lower due to higher yields.

The new Ag Nav calculating carbon footprints on farms from Bord Bia, Teagasc and the ICBF needs accurate figures for Irish grain, so that it can accurately differentiate between imported and native feeds, and their impact on farms’ carbon footprints.