Writing about that made me look up for more information on those differences. And then I remembered that the final results of a new farm census were released in 2019, after two years of data collecting and processing. For those who like numbers —and I do! — it feels like heaven. And if one wants to show Brazilian peculiarities to an American audience, which is my case, it feels even better.
The first thing that caught my attention was the number of farms. In 2017, Brazil had 236,245 soybean farms. And what is interesting in that? The number of farms by state. In top producer Mato Grosso, there were only 7,097 soybean farms in 2017. That means that the average size of a soybean farm in the state was 1,249 hectares, or 3,086 acres.
Scale of production
Yes, that’s huge and confirms what you’ve probably already heard about producing soybeans in central Brazil. Far away from the export ports and, in the beginning, back in the 1970s and 1980s, lacking of almost everything that makes agriculture possible, Mato Grosso had (and still has) to rely on the scale of production to make the soybean production profitable.
Since the price received by farmers is based on the export parity (Chicago + export premium – port costs – truck or rail freight from port to producing region), prices in Mato Grosso are lower, for example, than in Paraná, in southern Brazil, which is closer to ports. Just to give you an idea, last week a 60-kg bag of soybeans for delivery in February in northern Mato Grosso was at BRL 70.00 ($7.42 per bushel), while in western Paraná it could be sold by BRL 80 ($8.48 per bushel).
There are big farms in the South too, no doubt. But, since the soybean price is higher due to logistical reasons, a small farmer can profit from growing soybeans — something unthinkable in Mato Grosso. The other reason that helps explain the gap is history.
Southern states (Rio Grande do Sul, Paraná and Santa Catarina) started farming in a more organized way in the 19th century, when the first European immigrants arrived (four centuries after the Portuguese settlers) and have a strong cooperative tradition. Most people who started farming in central Brazil in the 1970s and 1980s were from the South, but they were not able to replicate the model in states such as Mato Grosso.
If you’d like to know how Brazilian numbers compare to the US, click here to visit the 2017 Census of Agriculture. For those who’d like to see more Brazilian numbers (all in Portuguese, unfortunately, but with a very friendly interface), click here. I’ll visit the subject again in future columns.