Brazil Could Increase Crop Acreage 70 mac by Converting Pastures

We have been reporting for years that the potential to expand soybean and corn acreage in Brazil is basically unlimited as long as prices are high enough to insure a return on investments for Brazilian farmers. The reason it is unlimited is because soybeans and corn generally do not compete for the same acres, but instead are planted one after the other in the same area. Additionally, most new crop acreage in Brazil is the result of the conversion of degraded pastures to row crop production and there are a lot of degraded pastures in Brazil suitable for conversion.

FarmDoc Daily published an excellent summation of the situation in Brazil on April 9, 2024 (Potential for Crop Expansion in Brazil Based on Pastureland and Double Cropping by Joana Colussi, Nick Paulson, Gary Schnitkey, and Jim Baltz from the University of Illinois and Carl Zulauf from Ohio State University).

They reported that the Brazilian Agricultural Research Service, Embrapa, estimates that 70 million acres of pastureland could be converted to crop production without any additional deforestation. Most would be in the cerrado area of central Brazil and it would represent a 35% increase in the current production acreage.

Pasture degradation is caused by overgrazing, insufficient weed and pest control, and lack of soil fertilization. Due to the high cost of fertilizers compared to the average cattle price, it is often more profitable to convert the pasture to cropland instead of improving the pasture for livestock grazing. Over the last two decades, from 2000 to 2021, Brazil converted 52 million acres of degraded pastures to cropland according to the Federal University of Goias.

In the Embrapa analysis, the potential agricultural expansion excluded areas protected by federal legislation. The law requires landowners to maintain a fixed amount of area as native vegetation, which varies by biomes. In the Amazon biome, 80% must remain in native vegetation, 35% in transition zones between the Amazon and Cerrado, 20% in the Cerrado, Atlantic Forest, Caatinga, Pantanal, and Pampa biomes.

At the state level, the largest quantities of degraded pastureland with potential for conversion are in the states of Mato Grosso, Goias, Mato Grosso do Sul, and Minas Gerais (see map below).

Brazil can further expand the cultivated area by greater use of double-crop corn planted after soybeans are harvested in January and February. Conab estimates that 40% of the soybean acreage in the 2022/23 growing season was followed by a second crop of corn. When focusing on the states that accounted for nearly all the safrinha corn, approximately 50% of the soybeans were followed by safrinha corn (see table below).

The amount of pastureland available for crop production is evident when you drive through Brazil. What you see is pasture, pasture, pasture, row crops, pasture, pasture, pasture, row crops. As long as domestic and international market dynamics support commodity prices, the conversion of pastures to cropland in Brazil will continue long into the future.

Tags: safrinha corn, pastures, row-crop, corn, Brazil, soybeans, Production, crop, acreage