Brazil has become a major player in commodities during the last couple decades. The country is a major producer of coffee, soybeans, corn, sugar, and orange juice. The rapid increase in agriculture production in the last few decades from Brazil has probably prevented massive shortages to world inventories.

Brazil has received massive investment into agriculture production in recent years. Large hedge funds have invested in agriculture land and valuations have increased substantially.

The Brazilian government has tried to prevent foreigners from investing in their land.

Many people would be surprised to see the widespread use of modern farm equipment from John Deere and other leading manufacturers. They have become much more efficient in years in their agriculture production. Brazil is typically more competitive than other countries on the world export market for many commodities.

Coffee

Brazil is the world leader when it comes to coffee production. They are the largest producer of the higher quality Arabica beans. Vietnam is the largest producer of Robusta beans. Colombia is the second largest producer of Arabica beans and they are a distant second.

The tone for the coffee market is set by Brazil. Their production really dictates the direction of the market. The coffee regions in Brazil have to worry about threats of a freeze every year. It is much like the scenario of oranges in Florida. About every five years a freeze will hit. When it does, prices of coffee can soar.

There is a somewhat odd growing cycle for coffee in Brazil. They have an “on” year and the next year is an “off” year. The on years are full production and they typically replenish stockpiles. The off years normally have a drop in production of 10 to 20 percent.

Grains

Soybeans are the main focus for Brazil. They have become very competitive in production with the U.S. Almost all of the soybeans produced in the U.S. are the genetically modified beans. Brazil has been more reluctant to use this variety.

Corn is also a major crop in Brazil, but they are not near the production of the U.S. Brazilian farmers have become very efficient at farming, but there are many problems with the infrastructure in Brazil. They do not have the transportation system as the U.S. does. It is common to see worker strikes and delays in getting grains out of their ports.

Orange Juice

Most people think of Florida when it comes to orange juice. Florida was the world’s leader in orange juice production, but Brazil has taken over the lead in recent years. That is hard to believe, but they are quietly doing this for many commodities.

Sugar

Brazil is a major producer of sugar. The interesting thing is that much of their sugar goes into producing sugar-based ethanol. In fact, ethanol stations are just as common as gas stations in Brazil.

The growth in commodities in Brazil should continue to grow into the future. They have invested heavily in agriculture in recent years. A modernization of their infrastructure would help tremendously. Nonetheless, Brazil is one of the top commodity producers in the world.