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Brazil’s Soy Acreage Growth Slowest in Ten Years

Going into the 2016/17 season, Brazil’s soybean acreage will grow by an estimated 2% over the current season, representing the slowest growth since 2006/07 when challenging market conditions caused soybean acreage to decline by 9% according to Brazil’s Agriculture Ministry.

Although the expansion of soybean acreage is at its lowest in a decade, Brazil’s soybean area is still on pace to reach a new record of 33.9 million hectares (83.7 million acres) – up from 33.2 million hectares this season, according to an average of forecasts. Over the past ten years, climbing global demand, particularly from China for the oilseed has led Brazilian soybean acreage to expand by 61%.

Conditions driving the decline in soy acreage including a domestic shortage of corn driving prices to record highs this year, leading farmers to dedicate more acreage to corn rather than soybeans, and tight credit conditions brought on by the country’s economic downturn, increasing amount of loan defaults and unemployment.

If weather conditions remain conducive, the estimated soybean acreage for this coming season should produce 103.8 million tons of soybeans, bypassing the 95.3 million tons produced this season and setting a new output record for the country.

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