Did you know? The heat in the upper six miles of the earth’s crust contains 50,000 times much as energy as found in all the world’s oil and gas reserves combined. Despite this abundance, only 10,500 megawatts of geothermal generating capacity have been harnessed worldwide. For more information view the text and data in Chapter 5 of Plan B 4.0: Mobilizing to Save Civilization.
Chapter 9. The Brazilian Dilemma: Feed Supplier for the World?
Brazil’s impressive capacity to raise soybean production has raised questions about whether it could also become a leading world supplier of grain for food and feed. As of 2004, the country is a modest net importer of grain and has been for several decades. Like other tropical countries, it has difficulty producing wheat in its tropical and subtropical regions. Brazil’s wheat is produced almost entirely in its southernmost states, on the border with Argentina. Given the heavy fertilizer requirements in the cerrado, wheat production costs in the expansion region are nearly double those of Argentina and the United States. It thus seems unlikely that Brazil will emerge as a wheat exporter unless world wheat prices climb far beyond current levels. 20
Wheat and rice are Brazil’s two food staples. The nation consumes roughly 10 million tons of wheat per year, producing half and importing half. In contrast, it consumes roughly 8 million tons of rice a year and is essentially self-sufficient. Given the tightening rice situation in Asia, could Brazil boost its rice production enough to produce a surplus for export to Asia? Is there enough water in Brazil’s rice-growing states, all in the south, to expand production of this water-intensive grain? The Amazon basin has an abundance of water, but are its soils suited to rice production? 21
Corn, which totally dominates Brazil’s grain harvest at over 40 million tons a year, is used primarily as a feedgrain. Until recently, Brazil imported corn, but it is now self-sufficient and typically exports a few million tons per year. Corn rotates well with soybeans since the latter fix nitrogen, for which corn has a ravenous appetite. Soybeans grown in rotation with corn are less vulnerable to damage from disease and insects, but corn and soybeans are not a perfect marriage in Brazil, simply because corn yields are relatively low on the cerrado soils. While Brazil’s soybean yields match or exceed those in the United States, its corn yields run around 3.5 tons per hectare, compared with U.S. yields of 9 tons. In addition, corn grown on the nutrient-poor cerrado soils requires heavy doses of fertilizer, especially nitrogen. Unfortunately, nitrogen leaches through these porous soils, leading to high nitrogen levels in both surface and underground water. 22
Beyond these agronomic and environmental issues, transport costs are formidable. Although a bushel of corn is worth less than half as much as a bushel of soybeans in the world market, the cost of transporting it from the remote interior to the coastal ports is the same. Whether Brazil could overcome the combination of heavy fertilizer requirements, low yields, and high transportation costs to become a major corn exporter remains to be seen. 23
Corn is not the only feedgrain option. Sorghum is also a possibility. Although sorghum output in Brazil is limited, the annual harvest has jumped from less than a million tons to over 2 million tons within the last three years. Since this is a drought-tolerant crop that does well during the dry season, it could find an ecological niche in the rotation systems in the drier regions of the Brazilian cerrado. 24
Brazil’s annual net grain imports of 8 million tons during the 1990s have dropped to a modest 3 million tons, mostly wheat, during the current decade. Given the robust character of the country’s agriculture, the net imports could be eliminated entirely and Brazil could become at least a small net exporter, largely on the strength of its corn exports. The key question is, How much would the world corn price have to rise to justify a large expansion in production for the world market? 25
Brazil has demonstrated clearly that when the world soybean price is $6 a bushel or above, farmers will invest in the land clearing and the government will invest in the needed infrastructure to expand soybean production and exports rapidly. It is doubtful, however, that it can
produce large quantities of corn for the world market at the $2.50 per bushel price of recent years if the transport cost to Europe is $1.59 a bushel, as it is for soybeans. It does not seem likely that Brazil will become a major supplier of grain to the world unless corn prices rise to $4 or so. Brazil’s weakness as a grain producer is evident when it is compared with the United States. While it is about to overtake the United States in soybean production, it produces only 60 million tons of grain compared with 360 million tons in the United States. (See Figure 9–5.) 26
20. USDA, op. cit. note 1; Melissa Alexander, “Focus on Brazil,” World Grain, January 2004.
21. USDA, op. cit. note 1.
22. Ibid.; Vania R. Pivello, “Types of Vegetation,” Embassy of Brazil in the United Kingdom, at www.brazil.org.uk/page.php?cid=283&offset=0, viewed September 2004.
23. USDA, op. cit. note 1; Pivello, op. cit. note 22.
24. USDA, op. cit. note 1.
26. McVey, op. cit. note 17; Schnepf, Dohlman, and Bolling, op. cit. note 10; Figure 9–5 compiled from USDA, op. cit. note 1.
Copyright © 2004 Earth Policy Institute