Brazil will surpass the United States as the largest producer of soybeans this year, taking over the top ranking for the first time in history, oilseeds crusher group Abiove said.
The U.S. is expected to harvest 116.48 million tonnes of soybeans later on in 2018, falling short of Brazil’s estimated collection of 117 million tonnes for its crop year that is just drawing to a close, Abiove said, citing United States Department of Agriculture figures released on Thursday.
Brazil, already the world’s largest soybean exporter, is expected to expand this lead in the coming years thanks to its unique ability to expand planted area, Abiove said.
“The Americans already are using the maximum possible (area),” said André Nassar, president of Abiove, in an interview.
Brazilian farmers have practically finished harvesting their soy for the 2017/18 crop year, which kicked off in September, as the U.S. is just beginning to plant its 2018 crop.
Private consultancy figures place Brazil even further ahead this year, drawing near to the record 2017 U.S. crop of 119.5 million tonnes.
Abiove itself revised its soybean crop estimate to 118.4 million tonnes on Friday, up 0.9 percent from its own April forecast.
Brazil’s toppling of the United States as the world’s largest soybean producer stems from logistical improvements, gains from planting second corn as a rotation crop, all of which increase farmer yields, Abiove said.
The South American country is expected to post further gains thanks to ample area to expand planting, as it has been growing its planted area at a pace between 500,000 and 700,000 hectares (1.2 million-1.7 million acres) per year.
By growing 500,000 hectares, it can add up to 2 million tonnes of soy to the market per season.
“This is something the Americans are unable to do. The area there expands and contracts because of the competition between soy and corn” for planted area, Nassar said.
U.S. soybean farmers are expected to reduce harvested area by 1.45 percent in the current marketing year, to 88.2 million acres (35.7 million hectares), according to the USDA. Brazil’s own planted area is 35.09 million hectares, according to Brazilian government data.
Brazil could open up new land for agriculture transforming pastures into grain fields, Nassar said. Such spaces already exist and using them would not contribute to deforestation.
Demand on international markets also remain strong, with Brazil expected to export a record 72 million tonnes this year, according to Céleres, a consultancy.