Increasingly I’m getting a lot of communication from farmers and agribusiness people in South America. Every day I tweet my commodity views from my farm office near Dresden Ontario Canada. It became evident to me quite early on how much I could learn about South American agriculture on Twitter. However, it came as a surprise to me the number of people involved in Argentinean and Brazilian agriculture that started to follow me and ask me questions. That southern hemisphere sure has the juice.
I’ve never visited South America. I got close once, off the coast of Trinidad, but that was about it. However, 25 years ago your loyal scribe found himself in New South Wales Australia. I visited many farms on my trip at that time even rescuing a lamb, which had got pinned between an auger and a grain bin. That was a bit of a strange problem for this Canadian. However, as I lifted the auger off the animal I think I was much more worried about the poisonous insects which seem to be everywhere on Australian farms.
One of the indelible images that have always been etched in my mind came from that trip in 1984. I was touring a farming region near Jerilderie New South Wales when I came upon a large field of soybeans. As I walked into the field the thought came over me that the southern hemisphere had hardly tapped its production potential and the specter for large production increases globally would come from there. That was a long time ago now, but wandering through a soybean field in the middle of January on the other side of the world certainly had an impact.
We have certainly seen since that time how South American production has impacted global agricultural markets. Argentina and Brazil now produce more soybeans than the United States. Look carefully at the agricultural press and you will see that corn production is increasingly being pushed in Brazil and Argentina. These high prices for feed grains are having an impact on Southern Hemisphere farmers. There is a lot of buzz this year about how corn acres will impact the consistent growth of soybean acres in 2012 and 2013.
It is obvious that I need to visit Brazil and Argentina. In southwestern Ontario there are a few farmers who visit there and vacation there on a regular basis. They have invited me to come many times, and one of these days in the not too distant future I am going. It is one thing reading about it, but I want that South American soil firmly ensconced under my fingernails.
Interestingly enough, last week I saw something come across my desk, which talked about a new Brazilian agricultural export. As part of the Pro-Savana deal signed last year, Brazilian farmers are headed to Mozambique to help that country increase its agricultural production. News of that kind jilted me, as I’ve always known about African agricultural production potential but this venture seem to add up. The Brazilians and the Mozambicans have a shared colonial and common language as well as climate and terrain. For instance, northern Mozambique and Brazil’s vast central savanna, the Cerrado, are very similar. The Brazilian Cerrado, once a pioneer region has been transformed into an agricultural powerhouse over the last 30 years.
The Pro-Savana deal signed by the Brazilian and Mozambican agricultural research institutes will cede 6 Million hectares of land in the northern regions of Mozambique to Brazilian farmers for $13 per hectare. There will also be some assistance from a Japanese international cooperation agency. The bottom line for the Mozambicans is to boost agricultural production in a very big way, Brazil style.
So what do we think of that? Interesting, based on the fact that our agricultural commodity markets are screaming that we need more supply. We have all come to accept the fact that South America is an agricultural superpower, pumping soybeans into China like never before. However, one thing we may have missed is that our Brazilian friends might be exporting their expertise to similar regions in Africa to boost global production further. Does that mean someday southern Africa may be just like Brazil agriculturally? I know. That’s a stretch, but years ago I was standing on the other side of the world in an Australian soybean field, asking the same things about Brazil.
Of course the other reason that Brazil wants a foothold in Mozambique has to do with part of the deal gives them greater access to the Middle East and Asia. It’s all interesting stuff. However, what does it mean to the North American farmer?
It means that we are not alone. In fact, sometimes it feels like we are the center of the agricultural universe here in North America, but the world is shifting and expanding. The center of the agricultural universe continues to shift south and east. Yes, the 800-pound gorilla in agricultural markets is China. However, Brazil is right there too. Mozambique? Get used to it. The question is, who’s next?