Brazil seeks to increase domestic wheat production

Brazil, already a dominant force in global agriculture as a leading producer and exporter of multiple commodities, is steadfastly working to grow its domestic wheat production and become self-sufficient within the next decade.

The nation consumes more than 12 million tonnes of wheat and wheat-based products per year, more than its national production of roughly 9.5 million tonnes, according to the Foreign Agricultural Service (FAS) of the US Department of Agriculture. As a result, Brazil is among the top 10 largest wheat importers in the world, reaching an estimated 5.6 million tonnes in 2024-25.

The wheat planted area has grown by nearly 80% in the last 40 years, improving domestic self-sufficiency from 30% to 80% with the 2022-23 harvest. The volume of wheat milled also is increasing per year, with a 2% increase in 2023 to a total of 12.81 million tonnes processed, according to Abitrigo, the Brazilian wheat industry association.

Farmers and researchers have made strides in increasing crop production, yield and planted area, but challenges remain, the FAS said. Now, there’s renewed interest to cultivate land in the Cerrado biome, a savanna-like region in Central Brazil, with wheat seed varieties that are resistant to dry weather and soil conditions.

“Considering the history paved by Brazil with corn and soybeans, when the country shifted from a net importer in the 1980s to a primary exporter in current days, Brazilian tropical wheat is likely to gain momentum, as the other grains before it,” the FAS said.

The country is the world’s largest producer of coffee, sugar cane and oranges, and is one of the world’s largest producers of soybeans, accounting for nearly 40% of global production and 55% of exports. It is the second-largest producer of ethanol, and third-largest biodiesel producer. While sugar cane is the dominant ethanol feedstock, it is continuing to see a surge in corn-based production.

However, a portion of the nation’s success is its reliance on extensive farming methods that are believed to be a threat to biomes and biodiversity. Brazil cannot rely on commodity booms and greater land inputs for success but should shift toward a low-carbon productivity-led growth model, said the World Bank.

“Brazil’s natural endowments position it well to exploit new growth opportunities as the world shifts to low-carbon economic sectors and markets,” the World Bank said. “The agriculture sector has scope to curb deforestation and scale-up climate-smart land use while raising its productivity further.”

The World Bank noted that Brazil can decarbonize transport, industry and cities at a very low net cost of about 0.5% of GDP per year between now and 2050, which would position it “extremely well to integrate its business into the green economy of the future.”

Tropical wheat, milling

The tropicalization of wheat in the Cerrado region started in the 1920s, but the government continues to invest in the program, with 2.9 million reais ($502,000) in research and technology transfer detailed in the 2022 Term of Decentralized Execution (TED) for Tropical Wheat. The Brazilian Agricultural Research Corp. (EMBRAPA) estimates it’s possible to increase the Cerrado region’s planted area from 252,000 hectares in 2021 to 353,000 hectares in 2025.

The “tropical wheat” needs only 10 days of continuous rain during the flowering period, making it a preferred planting option for producers, the FAS said. It is planted in succession to soybeans and in rotation with corn and sorghum.

“This provides numerous agronomic benefits, such as breaking the cycle of pests and diseases in the area, mainly soil fungi, weeds and nematodes, aside from also providing a rotation of active ingredients of agricultural pesticides,” the FAS said.

But challenges remain, including:

severe instances of wheat blast, which can lead to a significant loss of production;
logistical hurdles such as the need for new equipment and machinery;
production costs related to imported fertilizers;
and the lack of large mills in the Cerrado region to process wheat.
Brazil has 147 milling facilities, with three new plants coming into operation in 2023, according to Abitrigo. Flour extraction was 76% with 36.1% destined for breadmaking and pre-mixes, 13.2% for the pasta industry and 10.1% for the cookie industry.

Mills traditionally are located in the northern and northeast regions of Brazil due to the location of ports and in the southern and southeast regions, where most of the wheat production is located, the FAS said.

Parana state has the most with 44 mills and 30% of the national volume. Rio Grande do Sul has 30 plants representing 17% of national production while Sao Paulo has 15 mills with 12% of production.

Crop production, trade

With the expected end of the El Niño weather pattern, Brazil’s corn production is estimated to rebound in 2024-25 to 127 million tonnes, a 4% increase from last year. Exports are estimated at 46 million tonnes with higher domestic consumption, especially by the ethanol industry.

Brazil became the world’s top corn exporter in 2023, passing the United States, after gaining access to the Chinese market at the end of 2022, the FAS said. Exports to China in 2023 reached 16.1 million tonnes.

“However, the situation changed in April of this year, with Chinese demand for corn dropping significantly,” the FAS said. “Post contacts attribute the decline to Brazil’s less competitive prices compared to other markets like Argentina and the United States, reduced availability of corn due to lower production this year, and China’s decision to decrease overall corn imports.”

China is also a major destination for Brazil’s soybeans, accounting for three-quarters of its shipments. Record exports of 102 million tonnes are expected in 2024-25, up from 99 million tonnes last season.

“The forecast is based on increased expectations of ample available supplies and an extremely favorable exchange rate,” the FAS said.

Soybean production is estimated at a record 161 million tonnes in 2024-25, a 6% increase from last season. Year-on-year yield gains are expected due to adoption and investment in technology, including genetically engineered seeds and chemicals and fertilizers.

Despite low prices, Brazilian farmers continue to expand soybean production, the FAS said, because it is more profitable than corn and relatively easy to grow.

Corn ethanol growth

Brazil is the world’s second-largest ethanol producer and has the world’s oldest ethanol program dating back to the mid-1970s. The ethanol blend rate with conventional gasoline can vary from 18% to 27.5%.

Sugar cane is the primary feedstock, but corn ethanol production, which emerged in 2014-15, is still on a steep upward trajectory, the FAS said. Total ethanol production in 2024 is estimated at 32.5 billion liters, down from 34.4 billion liters in 2023. Of the 2024 production, an estimated 25.5 billion liters are sugar cane-based, and 7 billion liters are corn-based ethanol.

Corn ethanol production increased 41% in 2023-24 and jumped another 1 billion liters in 2024-25, the FAS said. As of July 2024, Brazil had 22 corn ethanol plants with a combined nameplate capacity of 7.22 billion liters per year, for total corn demand of 17 million tonnes.

There are nine corn ethanol plants under construction for an additional 2.75 billion liters of products. If all projects are completed, Brazilian corn ethanol production could reach 13.8 billion liters in the next eight years, requiring more than 30 million tonnes of corn, the FAS said.

The nation is the third-largest biodiesel producer, with production estimated at 8.9 billion liters in 2024, an increase of 18% from the previous year. Its program started in 2005 with mandatory minimum blend rates, currently set at 14% and set to increase to 15% in March 2025. About 69% of the biodiesel production in 2023 originated from soybean oil and 16% is made from greasy material, the FAS said.

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Tags: Brazil, wheat