Converting pastureland to cropland is more financially rewarding than restoring it for livestock, Colussi explains. Ranchers find it more profitable to lease or sell land to crop farmers. Marina Cavalcante, a Bloomberg Intelligence analyst, noted: “Brazil’s steady yield improvements highlight the potential for further output growth through technology.” Grain production is projected to increase by 8-11% over the next two years, surpassing the 8% growth in planted area, driven by technological advancements.
Brazil faces challenges, including reliance on China, which accounts for 70% of its soybean exports. Logistics issues persist, with 65% of grain transported by road, and limited storage capacity increases risks. Unlike the U.S., Brazil lacks subsidized crop insurance, raising production risks. Colussi stated: “The risk to produce in Brazil is higher than in the U.S.”
Approximately 23% of Brazil’s land, nearly 500 million acres, is grassland or pasture, according to Jose Rossato Jr., a director at Coplana. About half could be converted to cropland, though poor soil quality and a strong beef industry will maintain significant livestock use. Market pressures also affect farmers, with planting expansion slowing in 2024 due to potential reductions in China’s soybean purchases amid sufficient stockpiles.
Despite these hurdles, Brazil is well-positioned to remain a leading global soybean supplier, meeting international consumption needs. Colussi concluded: “If the world needs more soybeans in the future, Brazil will be ready to offer this, because they have the land and expertise.” Brazil’s agricultural growth supports its role as a key exporter, particularly to markets like China, while contributing to global food security through efficient land use and technological innovation.
