Insight Focus
Brazilian corn production is expected to reach 100 million tonnes. This would represent a 10% increase over the previous harvest, driven largely by strong performance from the second crop in the Midwest. Continued investment in advanced machinery is also helping boost overall yields.
Brazilian Corn Crop Expected to be Robust
After going through a difficult period in 2024, with droughts in the Midwest, grain producers are finally breathing a sigh of relief. Good results are expected, especially for the Safrinha — the second corn crop — which should reach almost 100 million tonnes, about 10% more than last year, according to Conab.
“Some consultancies point to slightly higher numbers, but even the projections from official bodies like Conab, which are naturally more conservative, indicate a robust result,” says André Sanches, a corn researcher at the Center for Advanced Studies On Applied Economics (Cepea) at Esalq/USP.
Source: Conab
Including the result of the first harvest — which usually ends in late March in the Midwest — total corn production in Brazil should reach 126.8 million tonnes, approaching the 2023 record.
Source: Conab
Ideal Weather Conditions Support Crop
The weather has helped the current harvest to grow. In the Midwest, the country’s main grain-producing region, rain fell at just the right time, especially in April and May. The regular rainfall ensured good soil moisture, favouring crop flowering and grain filling.
“It is not common for it to rain in May, but this year we were blessed with rain. This was excellent for the crops,” says rural producer Zilto Donatello, owner of a 420-hectare farm in Mato Grosso, near Sinop, one of the main agribusiness hubs in the country.
Donatello and his son, Bernardo. Crédito: divulgação.
Not only did it rain, but it rained in the ideal amount — with more than 150 millimetres accumulated — ideal for good crop development.
“We should have good crop yield figures, around at least 8 tonnes per hectare,” says Donatello. This is above the regional average, where Safrinha yields have been around 6 tonnes/ha, according to Conab. “This kind of achievement is also due to the investments in cutting-edge machinery that we have made over the past years,” adds Donatello.
Source: Conab
Advanced Equipment Drives Higher Yields
The adoption of more advanced equipment — capable of optimising production and reducing losses — has helped significantly in recent years.
In 2021, when the price of corn exceeded BRL 90/bag (USD 16.36/bag) — around 55% above the 2020 average and 35% higher than current values — the most capitalised rural producers directed part of their income to modernising machinery. This is also contributing to the expected crop yields of this harvest, that should reach almost 6,000 kg/hac, around 8% more than last season.
Source: Conab
Harvest Supports Growing Domestic Demand
About 70% of production is expected to be consumed domestically, according to Conab – which is far from a surprise.
Domestic consumption has been increasing steadily, with corn being directed to sectors ranging from poultry farms, that use the input as a component of animal feed, to the biofuel industry. The surplus is usually exported.
Source: Conab
Approximately 54% of the corn produced in Brazil is used in animal feed, especially for poultry and pigs, according to Embrapa.
In Santa Catarina, for example, the leading state in pig production and second in poultry farming in the country, approximately 80% of the corn consumed is used for poultry and pig farming, according to the Institute of Agricultural Planning and Economics of Santa Catarina.
Today, Brazil is the second largest producer of chicken in the world, behind only the US — and the largest global exporter. The growing external demand for chicken produced in Brazil, which is competitively priced, has also contributed to the expansion of domestic consumption of corn.
Source: Comex
At the same time, other industries, such as corn ethanol, have been expanding. This harvest, the production of biofuel is expected to absorb around 19,000 tonnes of the country’s total corn production, on average 200% more than in 2020, according to a study by the University of Illinois in the US.
According to the Brazilian National Agency of Petroleum, Natural Gas and Biofuels, there are currently 25 corn ethanol plants in operation, with another 15 under construction. As a result, demand for corn for this purpose is expected to increase.
This harvest, Brazil is set to produce around 8.2 billion litres of corn ethanol. Ten years ago, production was approximately 140 million litres, according to Conab and the Mato Grosso Institute for Agricultural Economics (Imea). This highlights the impressive expansion the market has undergone.
Price Outlook Remains Uncertain
The expectation of a large second crop, with the harvest extending until September, has raised questions about how a greater supply might influence prices. Some producers have even avoided using terms such as “super harvest,” fearing the effect these expressions could have on the market.
For those less familiar with the sector, this caution may seem excessive. But considering the current uncertainties around prices, it is not difficult to understand producers’ fears.
Producers are closely monitoring various indicators, such as the US harvest. USDA projections indicate production of 15.8 billion bushels — 6% more than last season — with a planted area of more than 3.7 million hectares, the largest in the decade. If confirmed, this robust US supply could help to put pressure international prices.
The trade war between China and the US is also one of the factors that could influence prices. “In the coming months, it should become clearer whether there will be new changes in tariffs and whether China will be willing to buy more grains from Brazil,” says Sanches. “Until then, any prediction is premature.”
