A historic feat should occur in the 2024/25 production cycle, when the chances of Brazil overtaking the United States and becoming the world leader in agricultural exports are high. Last year, the American advantage was just US$9 billion (US$174 billion versus US$165 billion), numbers that tend to be repeated this year.
For 2025, with a record Brazilian harvest, the Ministry of Agriculture. The USA, on the other hand, .
Despite the fierce dispute, Brazil and the USA are in opposite situations regarding the impact of agribusiness on the performance of the trade balance. Here, export revenues are ten times greater (US$165 billion in 2023) than the sector’s import expenses (US$16.47 billion in the same year).
The US, meanwhile, is currently a net importer of food. In 2023, US$195 billion was imported against US$174 billion exported, generating a deficit of more than US$20 billion, according to data from the United States Department of Agriculture (USDA).
Rising dollar makes American agricultural products more expensive
In 2024, the American agricultural deficit is expected to close at US$30.5 billion. And expected to expand in 2025, . Part of the explanation lies in the strength of the dollar, which has made American products more expensive abroad. At the same time, the robust currency favors the acquisition of agricultural goods from other countries.
Other reasons include the decrease in prices of important commodities such as soybeans, corn and cotton, as well as the drop in exports of “American beef”.
In September, Brazil’s march towards global leadership in agricultural exports was addressed by the think tank North American Atlantic Council, based in Washington DC “With the potential to be the largest global food exporter, Brazil must strategically prepare for this role and the world must support it”, wrote analysts from the institute.
Brazil is at the top of the list of the world’s breadbaskets
The study places the country at the top of the list of the world’s breadbaskets with the greatest growth potential.
“Due to its incredible natural endowment, its advanced agribusiness and research sectors, its stability in an unstable world, and its well-developed integration into global agriculture and food markets, Brazil is now and will continue to be a leading agricultural power and partner critical in tackling the global food crisis”, say the study’s authors, Valentina Sader and Peter Engelke.
The warning, however, is that there is no flat path to guaranteeing food security for 10 billion people on the planet in 2050. From supply chain disruptions in the Covid pandemic to wars in Ukraine and the Middle East, through conflicts and government-imposed trade restrictions, it remains challenging to ensure that food is traded from places of surplus to places of deficit. “These forces [geopolíticas] will likely continue and perhaps worsen,” says the Atlantic Council.
Restrictions on agricultural exports: a trap that Brazil did not fall into
Protectionist measures to restrict agricultural exports, as occurred in Argentina in recent decades, are not on the list of actions that will guarantee Brazil a firm leadership in the global food supply. In the current legislature, a group of 13 PT deputies filed a protocol when there is a threat to internal supply. Exactly the opposite of what has been working.
“Brazil’s meteoric rise to number one among global food producers is due, in part, to its adoption of an outward-looking model that embraced global trade. During global food security crises, Brazil’s policymakers largely recognized the dangers and resisted protectionist measures to restrict its agricultural exports, unlike several other large producers,” the study says.
There is almost a consensus that Brazilian agriculture still has a series of years of strong expansion ahead, driven by the continuous addition of new areas to production. In October, it released projections about Mato Grosso’s growth over the next ten years. As the state concentrates practically a third of national agricultural production, it is a good thermometer for the sector as a whole.
Mato Grosso expands crops and agricultural exports
The soybean area alone, the main agricultural crop in Mato Grosso, is expected to reach 16.62 million hectares in the 2033/34 harvest. A growth of 33% in relation to the planted area in 2023/24. The average annual growth rate will be 2.91%, lower than the average of 3.99% over the last decade. The slowdown is natural, given the extensive area already occupied by oilseeds.
In corn, the expected expansion is 60.2%, reaching 10.9 million hectares cultivated. Much of this growth will come from the adoption of the second harvest (safrinha), which currently occupies only 54% of the soybean areas cultivated in the summer. In cotton, the cultivated area should grow by 40.6% and harvests should be 52% larger than current ones.
As a general rule, expansion in Mato Grosso will occur with the advancement of agriculture over pasture areas, which are currently underutilized. And even so, Imea’s calculations consider the conversion of only a fifth of the available fields.
Logistical bottlenecks hinder, but do not stop, agricultural development
Not even infrastructure and logistics bottlenecks, which reduce the margins of the productive sector, should contain agricultural advances. “If it were dependent on logistics, Mato Grosso would not be what it is today. Bottlenecks are not a major factor. It could be better, faster, if logistics evolved at a speed to support the state”, highlights Gauer.
The important thing about these projections, highlights Gauer, is that they are made with Imea models that have been achieving a high rate of success, year after year, in the last decade.
With studies under its belt, Imea tries to convince governments about priority actions. “We can come to the State and say, look, this region here is going to grow and these highways will need to handle X million tons. You need to look at these regions carefully in the coming years, because this will happen, whether you want it or not”, emphasizes the executive.
Time to prepare and plan development
In Imea’s assessment, if public policy makers pay attention to the growth of Brazilian agriculture, there will be no need to repeat the “infrastructure trauma” of previous years. When production came first, logistics followed.
The maxim that “if the government cannot help, at least not get in the way” will continue to be decisive in ensuring that the agricultural locomotive does not go off the rails. José Carlos Hausknecht, partner at , emphasizes that Brazil and Argentina stand out despite facing competitors that apply heavy subsidies to production.
Talking about applying more taxes or surcharging the sector is playing into other people’s hands. “The main factor is that the government does not get in the way, that it allows us to grow. Many people say that we have to tax agriculture, tax exports. Then it’s killing the goose that lays the golden eggs. This is the sector’s biggest fear”, he highlights.
Differences between Brazil, Netherlands and Belgium
Brazil is already the country with the largest share of the agricultural sector in total exports, reaching 36.1%, according to a study by the same Ipea. When comparing with GDP, agricultural exports are more significant in the Netherlands, with an 11.3% share, and in Belgium, with 8.6%. Brazil appears in third place, with 6.3%.
The Netherlands and Belgium, however, also have the largest imports from the agricultural sector in terms of GDP, between 7% and 8%. In Brazil this percentage is less than 1%. This makes the contribution of agriculture to the trade balance stronger, elevating the country to absolute leadership in this regard.
When the parameter is the Contribution to the Commercial Balance (ICSC), among the ten main agro-exporting economies in the world (USA, Netherlands, Brazil, Germany, France, Spain, China, Italy, Canada and Belgium), only Brazil, Canada, Spain and Italy recorded growth between 1995 and 2021, with Brazil standing out.
In terms of meat, Brazil went from being “neutral” in competitive terms in 1995 to becoming “strong” in the following years. In cereals, until the beginning of the 2000s, Brazil had no tradition as a corn exporter. This changed radically with the explosion of second-crop cultivation. In oilseeds, soybeans managed to maintain an increasing pace of competitiveness, leading among all countries in Contribution to the Trade Balance as well as in Revealed Comparative Advantage (VCR).
In milk, one of the biggest challenges
Among the main national agricultural chains, the dairy sector reports the worst result of productive specialization in the agro-export sector since 1995. It is precisely in this sector that there is a large concentration of family farmers. While in the main competitors the yield was between 7 and 10 tons per dairy cow, in Brazil this value was 1.7 tons per animal (FAO, 2021). Just above the world average yield of 1.1 tons per animal.
Overall, projections for the next decade suggest that Brazil should maintain, or even improve, the pattern that has been typical in this century: persistent increase in physical income and total factor productivity, above what would be normal in terms of proportionality to planted area.
It is the so-called land-saving effect, which will continue to occur in the coming years, according to the publication. The study was carried out by the Agricultural Policy Secretariat of the Ministry of Agriculture with support from Embrapa, and published in October.
Leader in agricultural exports, with a domestic market supplied
According to the survey, the areas occupied by crops are expected to increase from 92.2 million hectares in 2023/24 to 109.3 million hectares in 2033/34. An increase of 17.1 million hectares, driven by soybeans (11.5 million more), sugar cane (1.5 million more) and corn (2 million more hectares). This expansion will occur not only due to the demand for food, but also due to the increasing use of soybean and corn crops to produce biofuels.
Some crops, such as cassava, coffee, oranges and tobacco, are expected to lose area, but the reduction, in some cases, will be offset by productivity gains.
In relation to meat, the forecast is for growth of 22.2%, led by chicken (28.4%) and pork (27.5%). Even though there is strong demand from the international market for Brazilian meat, 60% of the increase in chicken production will be destined for the domestic market. In pork, the share in the domestic market will be 76.1%. Thus, the report concludes, “although Brazil is, in general, a large exporter of several of these products, domestic consumption will be relevant”.
Based on future projections, the history and the vocation of Brazilian agriculture, the country would need to “make a lot of mistakes” in order not to remain in the global leadership of agricultural exports, which it should take over in the next cycle, from the United States. It is worth reinforcing the Atlantic Council’s advice: “Brazil must strategically prepare itself for this role and the world must support it”.
