Last week, Bloomberg reported that corn growers in Brazil managed to displace the United States as the number one exporter of corn in the world. In the 2023 agricultural year, it is expected that Brazil will account for roughly 32% of global corn exports.

By comparison, data from the US Department of Agriculture shows that in the agricultural year ended August 31st, the US will only supply 23% of the global exports of the vital staple crop, which is well below the level of Brazil.

It is expected Brazil will maintain its dominant position in the 2024 harvest year which begins on September 1st. Over recent years, the United States had failed to occupy the top position among producers for only one year, 2013, in which US producers endured a devastating drought. Prior to that, in the 1960s, during the Kennedy administration, the United States had occupied the second place position for two consecutive years.

In the last ten years, America’s farmers have lost the top spots among soybean exporters and wheat shipments. Brazil seized the top producer title for soybeans in 2013. The next year, the European Union and Russian began to whittle away at American dominance in wheat production.

Analysts attribute the changing competitive structure to increasing labor and logistical costs in the United States, a shortage of available farmland, adverse effects of a long-running trade war with China, and the strength of the US dollar.

While the United States still produces roughly a third of the world’s soybean exports, it is only the fifth largest wheat exporter, accounting for only a single-digit share of the global export supply.

US authorities have also been discouraging exports by encouraging the use of domestically produced corn to generate ethanol for use as a gasoline additive. Roughly 40% of US domestically grown corn is shipped to domestic mills which produce ethanol for use in transportation fuels. Surpluses can await better prices within grain elevators for years before being released into the market.

At the same time, with a currency which is weakening, Brazil has upgraded its ports and infrastructure, which has solved earlier logistical issues with bringing its corn to the global market. In addition, with its warmer climate and longer growing season, farmers are able to generate two harvests per year, which offers them a significant competitive advantage over their American counterparts.