Agricultural powerhouse South America will have a greater-than-normal impact on global markets in 2022, a new Gro Strategic Assessment concludes.
Big producers Brazil and Argentina, hit by a second consecutive year of drought, are headed for smaller harvests of major crops, especially corn, soybeans, and sugar, Gro’s machine-learning models show. Even a robust US harvest, from the growing season that begins in a few months, won’t be able to make up for the depth of South America’s current crop troubles.
As a result, food prices, already soaring in most parts of the world, will remain elevated through yet another global crop cycle, further squeezing profit margins for food manufacturing and merchandising companies worldwide.
Gro’s Brazil Soybean Yield Forecast Model currently indicates a sizable production decline. A contraction on this scale would take global soybean ending stocks to levels not seen since 2015/16. Brazil is the world’s largest soybean producer and exporter.
In Argentina, Gro’s yield forecast models currently show both corn and soybean crops will be down by double-digit percentages year over year as drought expands in the country’s chief growing regions. Argentina is the world’s No. 1 exporter of soybean oil and soybean meal as well as a major supplier of corn to world markets.
Gro’s forecasts for South America are based on our extensive platform of data analytics, indices, and machine-learning models that have proved to be more reliable than government estimates and are available weeks or months earlier than official reports.
Get Gro’s new Strategic Assessment to see how South America’s production cycle will lead to tight global supplies for many commodities. And learn what impact that will have on US farmers’ planting intentions and global food-price inflation.