Brazil’s President Dilma Rousseff and Minister of Agriculture, Livestock and Food Supply Antônio Andrade officially opened the 2013/2014 harvest season at a ceremony in the city of Lucas do Rio Verde in the state of Mato Grosso, and released new data on an anticipated record year for Brazilian agriculture. This season, Brazil anticipates a harvest of 90 million tons of soybeans, which would earn it a title as the world leader in soybean production. Brazilian farmers are also bringing the country closer to becoming the largest food producer in the world, as they expect to harvest approximately 193.6 million tons of grain this season.
Speaking at the ceremony, President Rousseff remarked: "We celebrate today the victory of agribusiness in Mato Grosso, Lucas do Rio Verde, and in Brazil. We also celebrate the so-called vertical integration, which has produced, transformed, and created a large hub for agribusiness in our country. We know it has made a large difference for Brazilian agriculture, which makes us proud. These are the increasing gains of productivity, which we cannot abandon."
New survey data from the Strategic Management Advisory Board of the Ministry of Agriculture, Livestock and Food Supply (AGE/Mapa) reveals that the agribusiness Gross Domestic Product (GDP) of Brazil is expected to reach R$1.03 trillion in 2014, which is 4 percent higher than last year (R$991.06 billion). If the anticipated results are met, the sector's GDP will have expanded by 34 percent in ten years.
The survey also predicts that as crop production grows, the so-called gross value of production (GVP) is also expected to increase to the highest ever achieved in the country, totaling R$314.8 billion. This amount would be a 10 percent increase over 2013 and the first time GVP would surpass the R$300 billion mark in Brazil. The combined GVP of crop production and livestock breeding is expected to reach R$462.4 billion, up 7.5 percent from last year's result.
According to the Ministry, Brazil’s Agricultural and Livestock Plan 2013/2014 is the largest and most comprehensive in history, representing an investment of US$136 billion—an 18 percent increase over the previous harvest. Of this total, US$91.2 billion (67 percent) was dedicated to the harvest between July and December 2013, representing an increase of 50 percent over the same period during 2012.
"Do you know how much agricultural credit totaled for the 2002/2003 season? It was R$ 27 billion. Today, R$27 billion is incompatible with the needs of agriculture in this country. For this season, we have committed R$136 billion, saying: if we spend more, we´ll have more,” said President Rousseff.
Brazil's agribusiness sector has additional growth prospects, particularly as international markets for products such as maize and meat opened in 2013. Last year the sector exported US$ 99.97 billion - which represented over 40 percent of all Brazilian products sold to other countries. In 2014, Brazil’s agribusiness industry is expected to surpass US$100 billion in exports.
The Midwest Region
The Midwest region of Brazil was chosen to host the official opening of the harvest because it is the main producer of grain in the country, accounting for 40 percent of national production. This area has become increasingly arable and important to the Brazilian agriculture sector due to the work of researchers from the Brazilian Agricultural Research Company (Embrapa), who in the 1970s developed technologies to correct soil acidity in the Brazilian Cerrado and adapt plants from other biomes to the Midwest environment.
Embrapa's research allowed for unprecedented growth rates in agricultural yield. In less than four decades, while grain production increased by about 1,400 percent, the actual area used for grain cultivation only increased by 400 percent. The country’s largest producer is Mato Grosso state, accounting for a quarter of the harvested grains in Brazil, and is also the country’s lead producer of soybean and maize.
Agribusiness Exports Reach Nearly US$ 100 Billion
Brazil’s agribusiness exports reached US$ 99.97 billion in 2013, an increase of 4.3 percent over 2012. Imports grew by 4 percent, reaching US$17.06 billion. Thus, the balance of trade for agribusiness was positive at US$ 82.91 billion. Brazil exported US$ 30.96 billion in soy complex in 2013, which was the primary export sector for the year. Meat exports reached US$16.80 billion, while maize exports totaled US$6.25 billion in 2013.
Brazil’s continued expansion of international agribusiness trade strengthens its position as one of the largest food producers and exporters in the world. One of the reasons for such growth in the sector is expansion into new markets that now purchase Brazilian agricultural products.
China, for example, is the primary purchaser of Brazilian soy, and has also shown interest in other crops. In 2013, Brazil’s Ministry of Agriculture, Livestock and Food Supply and the General Administration for Quality Supervision, Inspection and Quarantine of China (AQSIQ) signed a protocol that allows for the export of Brazilian maize to China. The negotiations are part of the Brazilian federal government's strategy to open new markets, providing for even greater access and opportunities for Brazilian agribusiness exports.
Brazilian Meat Gains Market Share in 2014
The Ministry of Agriculture, Livestock and Food Supply, through its Secretariats of International Relations (SRI) and Agricultural Surveillance and Inspection (SDA), negotiates the opening of new markets for Brazilian meat exports. One of the most anticipated deals for 2014 is the possible access of Brazilian meat to the United States market—which has been under negotiation since 1999. The North American country is the world's largest importer of beef, and is a global model for many other markets regarding health standards.
Meat production in Brazil for 2014 is expected to reach approximately 26 million tons of poultry, beef and pork. This number is 1.8 percent higher than 2013 figures, when 25.5 million tons of these meats were produced. Increases in both domestic and international demand are central factors boosting the country's production. Poultry is most prominent in the national portfolio, representing 48.8 percent of Brazilian meat produced, followed by beef (37.5 percent) and pork (13.7 percent).
Agribusiness and the Brazilian Economy
Agribusiness contributes significantly to the Brazilian trade balance – the sector comprises a total of 41 percent of the country’s exports; 23 percent of the country’s GDP formation; and generates 30 percent of all jobs in Brazil.
Brazilian food is currently sold in more than 170 countries on the global market. The quality and health safety of the country's agricultural products are proof of the efficiency and success of the supply chains involved in Brazilian agribusiness. Over the years, Brazil has grown from a buyer of various food products to a global supplier that the world depends on for food security.