Mole Valley Farmers
Farminguk
01 October 2016 | Online since 2003
OvoConcept


18 February 2014 02:53:43 |

High crop production set to challenge Brazil’s infrastructure


Brazil is expected to have another year of record production for several major agricultural crops in 2014, including soybeans and, depending on weather developments, sugarcane.
However, according to a recent research note, international prices for many of Brazil’s agricultural commodities fell in 2013 and could decline further in 2014.
Infrastructure and logistics remains a key point of concern for the country for 2014, particularly for the export market. With production and export volumes set to rise again, and further increases in transport fuel costs implemented at the end of 2013, there is little chance of lower logistics costs in 2014.
“Due to slowing economic growth and high inflation in Brazil, the domestic market will have limited scope to drive growth in sales in 2014,” explained Rabobank analyst Andy Duff. “It is possible that some growth may come from exports, but with declining global commodity prices, revenue growth would have to come from an increase in export volumes, or a declining exchange rate, or both”.
In the case of soybeans, the outlook is an increase in export volumes in 2014. Brazil’s soybean area in 2014 is estimated to be 7 percent, or 2 million hectares, up on area in 2013, as a result of favourable economics for soybeans vis-à-vis corn. If trend line yields are achieved, a harvest of 91 million tonnes is expected for the 2013/14 crop year, versus 81 million tonnes in 2012/13.
Brazil´s beef industry is also expecting 2014 to be another year of rising exports. With major competing exporters facing challenges in raising output, Brazil is well-placed to capitalize on growing import demand. The decline in the value of Brazil´s currency over the last year has also boosted the industry´s export competitiveness, and a further gradual decline in the BRL/USD exchange rate over 2014 is expected to sustain this competitive advantage.
Nevertheless, the positive impact of the weakening of the BRL/USD exchange rate on Brazil’s export competitiveness has been at least partially offset by rising costs, especially in services and logistics.
For example, diesel prices have risen three times since the beginning of 2013, with the most recent hike of 8 percent at the end of November 2013, Given the long distances between major crop production regions and the country´s ports, sustained major investments in infrastructure over the coming years remain pivotal if the country is to continue to expand production and export volumes while remaining competitive. However, this will not happen overnight - “Although Brazil is slowly addressing its bottlenecks, this will take years”, continues Duff. “For 2014, with higher fuel costs and another large grain harvest, logistics costs for Brazilian agribusiness are unlikely to decline”.

Download

0 Comment

loginuserlogo
Name

Please enter your name


Email

Please enter your email

Please enter valid email


Comment

Please enter your comment


Post Comment

Your comment has been submitted successfully. Please wait for admin approval.


Comments

No comments posted yet. Be the first to post a comment


USA | 30 September 2016
Toolbox unveiled to help preserve agriculture in Utah County

Rex Larsen, a fifth-generation Utah County farmer, is facing issues that the previous generations didn’t have to worry about, namely, rapid urban development encroaching on farmland. His farm, he s...


China | 30 September 2016
Will big agriculture mergers impact smallholder farmers?

A tsunami-sized wave of corporate megamergers sweeping the agrochemical industry has the potential to reshape the landscape of global farming and food production. If approved, the multibillion doll...


USA | 30 September 2016
Morris farm works to rebound after beef recall

A Connecticut farm in the middle of a beef recall is giving refunds, and fighting to guarantee its reputation. Truelove Farms had one steer sent off to Adams Farm in Massachusetts in late July for ...


USA | 30 September 2016
Small dairy farm wins with robotic milking

Old English cheese recipes and high-tech production put Kenton County farmer on the menu. On a rainy day, Eddie Gibson sits outside his dairy barn near Walton looking out at his 130-acre farm. Surr...


Canada | 30 September 2016
Schumer continues push against harmful Canadian dairy rules

A push against Canadian protectionism harming O-AT-KA Milk and dairy entities has reached federa Department of Agriculture Secretary Tom Vilsack. Democratic Sen. Charles Schumer said Wednesday that...



Trending Now

Viewed
Discussed


Top stories you may have missed
FarmingUK
FarmingUK Logo

FarmingUK

Farm subsidy payments funded by the UK taxpayer are being paid to millionai...


FarmingUK
FarmingUK Logo

FarmingUK

Labour will end the badger cull and prioritise ending bovine TB, Shadow Def...


FarmingUK
FarmingUK Logo

FarmingUK

A herd of rare White Park cattle could die out if its owners do not urgentl...


FarmingUK
FarmingUK Logo

FarmingUK

The UK government is "failing" to support farmers in the long-term accordin...


FarmingUK
FarmingUK Logo

FarmingUK

Retailer Co-op has announced that from May 2017 all of its bacon and lamb w...


FarmingUK
FarmingUK Logo

FarmingUK

Over 50 wildlife organisations have compiled a stock-take of all the UK's n...


FarmingUK
FarmingUK Logo

FarmingUK

In the run up to the EU farm ministers meeting the agricultural sector have...


FarmingUK
FarmingUK Logo

FarmingUK

The RPA must iron out a number of problems that still exist with 2015 BPS p...


FarmingUK
FarmingUK Logo

FarmingUK

Tourism businesses in the countryside are being held back due to the uncert...


FarmingUK
FarmingUK Logo

FarmingUK

A 24 point action plan aimed at revitalising Scotland's sheep sector after ...


closeicon
Username
Password