Why is the USDA Higher than Conab for Brazil’s Soybean Estimate?

There have been a lot of questions as to why there is such a big difference between Conab and the USDA concerning the 2023/24 Brazilian soybean estimate. Conab is estimating the crop at 146.8 million tons while the USDA is estimating the crop at 155.0 million (a difference of 8.2 million tons).

Some have speculated that the USDA is using a larger soybean acreage because the new soybean production in northeastern Brazil may not be fully accounted for by Conab. Both agencies utilize satellite technology to help estimate the soybean acreage.

In the March report, Conab used a soybean acreage of 45.17 million hectares which was up 82,000 from February.  The USDA is currently using a Brazilian soybean acreage of 45.9 million hectares, so the difference between the two is 730,000 hectares or 1.8 million acres (approximately 1.6%). Conab is using a soybean yield of 48.4 bu/ac while the USDA is using a yield of 50.3 bu/ac.

Therefore, the answer to why there is a difference of 8,2 million tons between the two estimates is because the USDA is using a higher acreage and higher yield. It is an open question if the estimates between the two agencies will be reconciled any time soon.

Acreage estimates in Brazil have been notoriously difficult given that the agricultural expansion is occurring in relatively remote regions of the country. We usually don’t know the final acreage in Brazil until we can “back-into” the acreage number by using the final export, domestic disappearance, and carryover numbers divided by the nationwide yield, which can also be suspect. Determining the acreage in Brazil is not easy, so I do not know who is correct, Conab or the USDA.

Tags: Brazil, Conab, estimate, soybeans, Production, yield, acreage, USDA