Mato Grosso: From soy state to corn state

21-11-2018 | |
Photo: Dreamstime
Photo: Dreamstime

Mato Grosso is known as the main soybean-producing state in Brazil. But also its corn production has been increased significantly over the last years.

According to a new report by Rabobank (Mato Grosso: Cornering the market), corn production in the Brazilian state Mato Grosso reached 26.4 million tonnes in 2017/18 season. This is 33% of the total Brazilian corn production and 15 times the volume produced in 2000/01 (1.8 million tonnes).

Adding value to corn

Increasing corn production and low local prices have focused the atention of corn-processing industries and of farmers on opportunities to add value to corn within the state. In recent years, efforts to add value to grain production within the state have resulted in expansion of animal production production (the most traditional means of adding value) and construction of a number of corn-based ethanol plants, with more in development. Regarding animal production, beef, poultry and pork production in Mato Grosso are expected to increase to 1.7 million tonne, 0.75 million tonnes and 0.30 million tonnes by 2023. This represents an additional 800,000 tonnes of animal protein. This is an increase of 40% compared to the current production.

Interest in corn ethanol and by-products

Assuming that all projects announced to date are completed, Mato Grosso’s corn ethanol production capacity is expected to increase from 0.6 billion litres to 2.0 billion litres in 3 to 5 years. The investment in corn ethabol is not limited to large corporates. Farmers in Mato Grosso are also analysing small-scale, on-farm ethanol plants (e.g. 5-10 million litres capacity) as alternatives to add value to their corn. The idea is to produce ethanol and to use the distiller’s grains on-farm for animal feed, such as for cattle in feedlots. According to Rabobank estimates (assuming prices in September 2018), such as investment would boost revenue by 150% compared to simply producing and selling corn.

Increase corn to continue

Rabobank expects that in the future more corn will be planted as a second crop on the soybean fields in Mato Grosso. The projected corn production in Mato Grosso is 43 million tonnes in 2022/23. This is 27 million tonnes more than this year. Local consumption is expected to increase from 5 million tonnes to 10 million tonnes during this period, suggesting that the state’s corn exports should rise from 16 million tonnes to 24 million tonnes by 2022/23.

Source: Rabobank

Emmy Koeleman Freelance editor