Mato Grosso: Cornering the Market
Low corn prices in Mato Grosso are encouraging farmers and corporates to add value to the state´s corn via boosting animal protein output and ethanol production.
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Established as the main soybean-producing state in Brazil since the 1990s, Mato Grosso has significantly increased its contribution to Brazilian corn production since the beginning of this century. Climatic conditions enable double-cropping in most producing areas, with second-crop (‘safrinha’) corn planted following the soybean harvest.
Corn production in Mato Grosso reached 26.4m tonnes (33% of total Brazilian corn production) in the 2017/18 season, 15 times the 1.8m tonnes produced in 2000/01. Increasing corn production and low local prices have focused the attention 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 protein production (the most traditional means of adding value) and construction of a number of corn-based ethanol plants, with more in development. This requires significant investment but is expected to generate substantial additional revenue and margins. In addition, at the farm level, it represents a diversification of business beyond the basic soybean/corn model.
Despite the projected increase in local consumption of corn resulting from the growth in such activities, Mato Grosso´s production of corn is projected to be sufficient for steady growth of corn exports over the coming five years.
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