Oct 17, 2022
Pastures Account for 18.9% of Brazil Territory or 400,000,000 Acres
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
One of the most frequently asked questions concerning Brazilian agriculture is "How much can they expand their soybeans and corn production?" The answer to that question is simple, if commodity prices stay favorable, Brazil's soybean and corn expansion potential is essentially unlimited.
The reason for the unlimited expansion potential in Brazil is the fact that Brazil has a huge amount of land that could be converted to crop production, even with the exclusion of the Amazon Region.
A recent study conducted by Fundacao Getulio Vargas (FGV) concluded that 18.9% of Brazil's territory is currently in pastures or approximately 160,000,000 hectares (395,200,000 acres). Of this total, 52% or 89,000,000 hectares (220,000,000 acres) are considered degraded pastures. These are pastures that are low in fertility, eroded, poorly managed, and have a low carrying capacity. These are also the type of pastures that are the focus of much of the crop expansion in Brazil.
The Brazilian research service, Empraba, has been promoting the conversion of degraded pastures to row crop production to increase productivity on land that has already been cleared and thus relieving pressure to deforest more land. It is a win-win for ranchers and the environment. The current cost to convert degraded pastures to row crop production is approximately R$ 10,400 to R$ 11,400 per hectare ($800 to $900 per acre). This includes fertilizers, inputs, labor, machinery, fuel, etc. The cost is about double it was five years ago.
Embrapa has also promoted the renovation of degraded pastures to increase productivity, which also reduces the pressure to clear new land for the expansion of cattle ranching. They estimate that the cost of renovating and maintaining moderately degraded pastures is between R$ 979 to R$ 1,541 per hectare ($76 to $120 per acre). The cost for renovating severely degraded pastures is between R$ 1,563 to R4 2,100 per hectare ($121 to $163 per acre).
Cattle ranchers could expand their production simply by renovating their pastures instead of looking to the Amazon Region for new pastureland.
Even with incentives to be more productive with land that has already been cleared, reducing, or stopping deforestation in Brazil is very difficult. The Bolsonaro administration has turned a blind eye to deforestation by cutting resources and personnel for agencies that are trying to reduce deforestation. The administration has also stated that they would not designate any new indigenous lands and that existing indigenous land should be opened to commercial enterprises including agriculture.