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Economist says Brazil could be biggest US competitor for exports for several years

An ag economist says increasing export competition from Brazil is not good news for American producers.   

Jim McCormick with AgMarket.Net says competition has ramped up since the early 2000’s. “They’re spending a lot of investments to expand their capacity in their ports and export facilities. China is investing in them.  The other thing is the currency situation.  The US dollar is higher than the Brazilian Real, so it makes them price competitive and really, really cheap.” 

He says Brazil’s could maintain their price advantage through the fall. 

He tells Brownfield China could create more trade deals with Brazil. Last year, the two countries signed an agreement for China to import corn. “With them solidifying that relationship even further, I would assume, the Brazilian agriculture sector is going to try and continue to expand their footprint and production capacity through better technology, genetics and all that.”  

McCormick says transportation and infrastructure issues have slowed getting the country’s record crops to market. “But, the reality is that product does eventually make it to the market just maybe not as fast as the buyers want it.”

He says if China continues to purchase Brazil’s commodities that could lead to infrastructure improvements.  

Jim McCormick, AgMarket.Net: