US crop: understand the relationship of US agribusiness with Brazil

 

US crop: understand the relationship of US agribusiness with Brazil

The movements of the United States of America tend to interest everyone. It is no different in relation to Brazil, especially when it comes to agribusiness, which is of interest to both sides. The harvest, for example, is surrounded by expectations.

In 2021, there was a great deal of doubt about how the corn and soybean crops would perform. However, Pro Farmer, a division of Farm Journal Media, showed encouraging results.

According to the survey, the estimate is that 15.116 billion bushels are harvested in the corn crop, with an average productivity of 177 bushels per acre. The soybean crop would be 4.436 billion bushels, with an average yield of 51.2 bushels per acre. These numbers are encouraging for agribusiness.

This is because the forecast made by the USDA (United States Department of Agriculture, in English) was lower. A greater impact from the drought was expected in the western states, but productivity in the East made up for the loss.

Why the concern about the North American crop?

The United States is on the list of the main agribusiness countries in the world. It is the main producer of corn and the second in soybeans, behind Brazil. Decreased harvest of the crop can lead to losses across the planet.

Thus, with the concern of restricted supply, there could be a rise in food inflation. It is the law of supply and demand, which also applies to agribusiness. If there is little supply of the product, but a high demand, the price goes up and can disrupt different negotiations around the globe.

On the other hand, the projection made by Pro Farmer drastically changes this scenario. Above all, it brings optimism to world producers, since there should be no shortage of grains in the market, which could intensify competition.

US agribusiness relationship with Brazil

As previously mentioned, the United States stands out among the first in the production of soybeans and corn. For this very reason, the crop is seen with much expectation in the world. Brazil “disputes” with the North American country the leadership of these grains.

In relation to soy, Brazilian agriculture is in the forefront. If we take corn into account, it is the Americans who appear in first place. Despite the growing production in the national territory, it is still much less than the other country.

Today, the United States is an important ally of Brazil in agribusiness. It is the second main trading partner, behind only China. Last year, exports to the North Americans were equivalent to 7%, according to the CNA (Confederation of Agriculture and Livestock).

On the other hand, imports also underscore the strong partnership between the two countries. Brazilians buy a lot from the Americans, with emphasis on the presence of pesticides and technologies used in agribusiness. This highlights how both are extremely important to the other's economy, particularly in the countryside.