Brazil Transportation Improvements Cause Concern

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Infrastructure gains could shrink window for U.S. soy exports

The United States is the world’s leading soybean producer, and right now it has the rivers, roads and rails to move all those soybeans from field to market. However, this status may not be sustained without continued investment in the U.S. transportation system. Brazilian soybean farmers continue to gain on their U.S. counterparts, and the country has big plans to improve its ability to move more soybeans into export position.

Recently, three soy checkoff farmer-leaders and two American Soybean Association (ASA) farmer-leaders spent time in Brazil to see firsthand the status of Brazil’s infrastructure. They saw advancements that are being made now, along with improvements still in the planning stage. Altogether, these projects could improve Brazil’s ability to compete with the U.S. in the global market.

Jim Call, checkoff farmer-leader and soybean farmer from Madison, Minnesota, was one of the Americans there to observe the developments.

“Before visiting Brazil, I doubted if they could compete with our transportation abilities,” says Call. “However, after seeing our number one competitor up-close, I realized Brazil’s progress could affect the way U.S. soybean farmers do business.”

Bill Beam, checkoff farmer-leader and soybean farmer from Elverson, Pennsylvania, also took part in the transportation mission.

“I was under the impression that Brazil’s transportation infrastructure was primitive, basic and highly inefficient,” says Beam. “After observing the northern region of the country, I was very impressed with the heavy investment Brazil is making to handle soybeans and how efficiently its transportation system operates.”

One transportation development the farmers witnessed was a floating terminal under construction in Belém. This new terminal should be operational in January, and it will help move more soybeans out of northern Brazil.

Joel Thorsrud, checkoff farmer-leader and soybean farmer from Hillsboro, North Dakota, remarked at the development in this area.

“In the past, everything moved to the south, but a large portion of the soybean production is in the center of the country, so it can also move to the north,” says Thorsrud. “They are building several loading facilities on the north coast where many large rivers flow, and barges are being developed so the traffic can move to these ports.”

In addition to waterway investments, Brazil is also investing in railways to the Port of Itaqui, which is the number one port in northeastern Brazil and fifth overall in volume. This infrastructure is important for Brazilian soy exports because of the Port of Itaqui’s proximity to the Panama Canal.

During visits to the country’s elevators, the farmers learned that Cargill is currently undergoing an expansion, and ADM has plans in the works to grow as well.

“I was surprised at the sheer amount of expansion,” says Beam. “They keep going further and further up the Amazon River with ocean-going ships and barges and the country is still building; it hasn’t peaked yet. It’s just a matter of time before the country has a very efficient system from one end to the other. It is pretty obvious that we have some serious competition.”

After the mission, Call says U.S. soybean farmers and the industry should feel a sense of urgency to respond with transportation improvements of our own.

“If Brazil can capitalize on these opportunities, it could mean a shorter export window for the U.S.,” adds Call. “To maintain our current competitive advantage, we need to invest in our transportation infrastructure now.”