Brazil’s grain output dramatically outpaces storage capacity
The 2022/23 crop season could post two records in Brazil. First, it could produce a record 313 million tons of soybeans, corn, cotton, rice and wheat. Second, that record production would cause a record storage deficit of more than 100 million tons.
“Storage capacity growth since 2010 has not been proportional to increases in crop production in the same period,” says Joana Colussi, postdoctoral research associate at the University of Illinois.
Only 15% of Brazilian farms have warehouses or silos. In 2021, Brazil’s storage capacity could only contain 67% of its total grain production. In 2010, the ratio was 90%.
The grain storage deficit in Brazil is concentrated in the central-west states (Mato Grosso, Goiás, and Mato Grosso do Sul), which account for almost half of the national grain production.
“Although public and private credit is available for building warehouses, Brazilian producers still need to be convinced about the positive return on this type of investment,” Colussi says. “This situation can represent a risk for future Brazilian agriculture competitiveness.”
From the war in Ukraine to evolving Chinese demand to bumper crops in South America, the trends are shifting for global grain flow. What will the future hold? That will be the topic of a panel at Top Producer Summit.