September 17, 2020
Brazil soy farms set to expand by more than 6% in the 2020 / 2021 crop season
Soy farmers in Brazil's north and northeast, where the Amazon rainforest and Cerrado savanna are located, are projected to expand their soy farms by more than 6% in the 2020 / 2021 crop season, its fastest rate in four years, Reuters reported.
Arc Mercosul and AgRural forecasts show both regions will add more than 350,000 hectares (865,000 acres) this crop season.
Both north and northeast Brazil include parts of what is known as Brazil's agriculture frontier. These are the Matopiba savanna region, Maranhao, Tocantins, Piaui, and Bahia states, as well as southern Para state, where the Amazon forest is.
The consultancies said more soy farms will be established at newly deforested areas, previously created pastures, and marginal lands, as soy prices surge. US soybean futures reached two-year highs on September 16 backed by China and financial funds' demand.
Environmental advocates said the new soy farms will accelerate climate change and increase greenhouse gas emissions.
Soy farmers said the law permits them to deforest a certain percentage of their property. This law differs by region.
The federal government has voiced praise to its farmers. Brazil is the number one exporter of soy and related products in the world.
Brazilian farmers are benefitting from selling their crops in BRL because of its weakness against the USD. About 50% of the 2020 / 2021 crop have been pre-sold.
Adriano Gome, AgRural analyst, said farmers will expand soy farms where possible because of the favourable prices.
AgRural estimates a 6.4% increase in soy-growing area in the north and northeast. Arc Mercosul is projecting a 6.8% growth.
Planting is set to begin this month in Brazil's center-west region, which includes major producer Mato Grosso state. Soy-growing area in the state is expected to grow 2.8% or 463,000 hectares.