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BIG GRAIN PLAYERS INVEST
Brazil’s statistics agency has estimated corn output could jump by 27%, and while a growing livestock sector will consume part of any increase, most will go to the export market, according to O’Neil.
“Domestic demand is not keeping up,” he says. “International grain traders are investing heavily in infrastructure, especially in the Cerrado, and expanding their presence. They see the new lands as a major part of future production and Brazil as a major supplier of corn and soy to world markets.”
To Favarão, logistics and storage are critical but (grower) profitability is more important.
“The corn trade is not as good as the soybean trade. We can hardly contract our corn, but soybeans are the opposite, so we imagine how much money we can make. There are very few corn buyers in Brazil, and they manipulate the prices.
“The major reason corn is not king in Brazil comes back to ‘money in the pocket.’ The profit we make on soybeans is better.”