- By Lynda Kiernan-Stone, Global AgInvesting Media
U.S. Soybean Farmers Losing Global Market Share to Brazil
Soybean production in both the U.S. and Brazil is booming. The U.S. is expected to harvest its second largest soybean crop on record, but, Brazil is gaining global market share at the U.S.’s expense.
Analysts expect the forthcoming U.S. Department of Agriculture (USDA) estimate to state that U.S. soybean production will equal 3.841 billion bushels – a 20% increase over the 10 year average according to a Bloomberg News survey. After combining the new crop with U.S. reserves still on hand from the record crop last year, the country will have the highest soybean supply on record. As a result, soybean futures have fallen by 14% and are expected to continue falling.
Adding to this glut is record production out of Brazil, and although the country is in the midst of an economic slowdown, its weakening currency is making it a tough competitor on global markets, especially in China.
In general, China’s soybean imports are increasing, with the bulk of the supply coming from Brazil. Last month China’s imports totaled 7.78 million tons – a 29% increase for the month year on year, after imports in July reached a record.
Until recently, Brazil’s ports were mired in bottlenecks and delays, but due to both public and private infrastructure investments, the country is gaining the capacity to meet overseas demand, while the falling real is giving the country a price advantage over the U.S. creating a challenging landscape for U.S. exports.