Historical Analysis of South American Corn Production: Record Yields and Productions in 2016/2017
By Sampath Jayasinghe
Decision Innovation Solutions, 11107 Aurora Avenue, Urbandale, IA 50322
http://www.decision-innovation.com/
A Snapshot of World Production
World corn production is forecast at 1,054 million metric tons (mmt), equivalent to 41.48 billion bushels, for the 2016/2017 marketing year(1), compared to 963 million mmt (37.92 billion bushels) in 2015/2016, a more than nine percent increase, based on the April 2017 World Agriculture Production report from the United States Department of Agriculture’s Foreign Agricultural Service (USDA-FAS). Figure 1 shows world corn production in mmt from the 2000/2001 marketing year to the 2016/2017 marketing year. If realized, this would be the largest production ever, with the previous record at 1,016 mmt (39.99 billion bushels) during the 2014/2015 marketing year. The significant increase in world corn production projection in the 2016/2017 marketing year is due to significant increased production in Brazil and Argentina. In this month’s article, we look at historical corn production and the current forecast for the major South American corn-producing region, mainly Brazil and Argentina.
South American Corn Production
While the United States has been the world’s largest corn producer, a significant increase in production is expected from South America in 2016/2017. Figure 2 shows world major corn producers as percentage of total world production in the 2015/2016 marketing year. Brazil now stands as the third largest corn producer in the world, surpassing European Union. Brazil accounts for seven percent of the world total corn production, behind the United States (36 percent) and China (23 percent) in the 2015/2016 marketing year. Argentina has become the fifth largest corn producer in the world, surpassing both Mexico and Ukraine. Argentina accounts for more than 3 percent of the world corn production in the 2015/2016 marketing year.
Brazil
Figure 3 shows Brazil and Argentina corn production in mmt from 2000/2001 to 2016/2017. Figure 4 shows corn yields (metric tons/hectare) of Brazil and Argentina from 2000/2001 to 2016/2017.
Brazil corn production is projected to be a record 93.5 mmt (3.68 billion bushels) in 2016/2017 compared to 67 mmt (2.63 billion bushels) in 2015/2016, a significant increase of 33 percent. The previous high was 85 mmt in 2014/2015. The production in 2015/2016 was relatively low as result of a drought during the second crop season.
Brazil has two corn crops due to the long growing season in the different parts of the nation. The first crop is generally planted in September and harvested in March. The second crop is normally planted during the January-March period and harvested during the June-August period. The first and second corn crops are grown in different parts of the country by different producers. The April USDA-FAS report shows higher crop area and yield from the 2016 first crop, and a record planting area for the second crop in 2017.
Brazil’s total corn area harvested in 2016/2017 is projected to be 17.3 million hectares (42.7 million acres) compared to 16.0 million hectares (38.5 million acres) in 2015/2016, an eight percent increase. Brazil’s corn yield is estimated at 5.41 metric tons per hectare (MT/HA), which is equal to 86 bushels per acre in 2016/2017. This is an increase of 29 percent from 2015/2016. The historical projected record yield in 2016/2017 is due to timely planting and excellent growing conditions throughout most crop areas in the country.
Total corn production in Brazil in the past 17 years has increased 125 percent, while the total harvested acreage has increased only 33 percent. Brazil corn yield has increased 69 percent in the past 17 years. Advancements in seed technology producing high yielding varieties, plus different soil and fertilizer management practices, can be attributed to this significant transformation in corn production during the last 17 years as shown in Figure 3 and Figure 4.
Argentina
Argentina is projected to produce 38.5 mmt (1.51 billion bushels) of corn in the 2016/2017 marketing year, compared to 29 mmt (1.14 billion bushels) in the 2015/2016 marketing year, an increase of 33 percent. The previous highest was 30 mmt (1.17 billion bushels) in 2014/2015. Corn harvested area in Argentina is estimated at 4.6 million hectares (11.36 million acres) in 2016/2017, compared to 3.5 million hectares (8.64 million acres) in 2015/2017, a significant increase of 31 percent. Argentinian corn yield is estimated at 8.37 MT/HA, which is equal to 133 bushels per acre in 2016/2017, compared to 8.26 MT/HA (132 bushels/acre) in 2015/2016, a slight one percent increase.
Total corn production in Argentina in the past 17 years has increased 151 percent while the total harvested acreage has increased only 63 percent. Argentinian corn yield has increased 54 percent in the past 17 years. Again, as in Brazil, Argentinian farmers have adopted advanced seed technologies that produce high yielding varieties, as well as advanced soil and fertilizer management, to realize a significant growth in corn production during the last 17 years as shown in Figure 3 and 4.
Concluding Remarks
Both Brazil and Argentina have more than doubled their corn production during the last 17 years. Both countries now are poised to produce their historically highest crop in the 2016/2017 marketing year. The significant growth in the U.S. corn-based ethanol industry in recent years is one of the many factors that can be attributed to the significant production boom in South America. Global corn demand has grown significantly in the last decade, mainly due to strong economic growth in China and other Asian countries demanding more feed to produce livestock and poultry. We look forward to investigating global corn export market growth and competitive market structure in upcoming AgMRC articles.
(1) Marketing year refers local marketing year of each country
