Brazil: Competitive Factors in Brazil Affecting U.S. and Brazilian Agricultural Sales in Selected Third Country Markets

Investigation No. 332-524
USITC Publication 4310

Summary

Brazil is one of the world’s largest agricultural economies and has emerged as a leading global exporter of numerous agricultural commodities, but its direct competition with the United States for sales of soybeans, grains, and meats to third country markets has been somewhat limited, reports the U.S. International Trade Commission (USITC) in its new publication.

Completed at the request of the Senate Committee on Finance, the report’s findings include:

• Over the past 20 years, Brazil has emerged as a leading global exporter of soybeans, soybean meal and oil, corn, beef, poultry, pork, cotton, and orange juice, in addition to traditional exports of sugar and coffee.
  
  
• Brazil's low-cost resource base, including ample land and water resources and weather patterns conducive to intensive land use, enables high-yield crop production across a wide range of agricultural products. Government-funded agricultural research has developed crop varieties that flourish in Brazil's previously untapped Center-West region. Low on-farm production costs have helped to make Brazil a competitive exporter.
  
  
• Despite tremendous potential, several important factors may serve to slow Brazil's expansion of agricultural production, including transportation, storage, and port infrastructure and capacity limitations; relatively high-cost commercial credit; some unresolved livestock disease issues; and Brazil's labor laws and tax structures.
  
  
• Although Brazil and the United States are both global exporters of grains and oilseeds, direct competition between the two countries currently is somewhat limited due to the substantial increase in global consumption.
  
  
• Limited competition between the U.S. and Brazil also exists in the meat sectors. Brazilian poultry exports are primarily produced and packaged for customers with exacting specifications, while U.S. poultry exports tend to be undifferentiated broiler cuts, such as leg quarters. In the beef sector, U.S. competition with Brazil is also limited because each country serves a different market segment. The United States supplies grain-fed beef destined for Canada, Mexico, Japan, and Korea, while Brazil supplies grass-fed beef used in processed products to other markets such as Russia. Because of import bans related to foot-and-mouth disease (FMD), market access for Brazilian beef and pork is restricted in many of the largest U.S. export markets.

The USITC’s report is now available at:
http://www.usitc.gov/publications/332/pub4310.pdf

Also available on CD-ROM and in print; call 202.205.2000 for more information.