December 31, 2014

Degraded Cerrado Pastures Source of new Cropland in Brazil

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

The primary area of agricultural expansion in Brazil in recent years has been in the cerrado areas of central Brazil. The cerrado (savanna) occupies 203 million hectares or 24% of Brazil's total land area across eleven states and the Federal District. The cerrado vegetation is characterized by native grasses interspersed with low twisted trees. This region is particularly important for cattle ranching and it is responsible for 55% of Brazil's beef production. It is also becoming the primary region for grain production in Brazil as well.

The extensive cerrado pastures (both native and planted) have allowed cattle ranchers in Brazil to produce grass-fed beef much cheaper than some of its major competitors. The cost of Brazilian beef production is approximately 60% of the cost in Australia and 50% the cost of beef production in the United States.

A significant percentage of the cerrado pastures are considered to be in a degraded state characterized by low fertility, low productivity, and increased levels of erosion. The Brazilian research agency Embrapa has conducted extensive research on how to improve these degraded pastures and on the conversion of some of these pastures to row crop production. In fact, Embrapa estimates that improving these pastures could result in a tripling of beef production as well as being a source of new row crop production as well.

Studies conducted by Embrapa indicate that as many as 32 million hectares of cerrado pastures are degraded which includes 60% of the planted pastures in the cerrado. Most of the degraded pastures (80%) were located in the states of Mato Grosso, Mato Grosso do Sul, Goias, and Minas Gerais. These pastures were identified through satellite monitoring and are the primary focus of the Low Carbon Agriculture Program (ABC Program).

According to Embrapa researcher Ricardo Guimaraes Andrade, the goal of the ABC Program is to renovate 15 million hectares of these degraded pastures by the year 2020. In doing so, he estimates that beef production in Brazil would increase 2.4 to 3.6 million tons per year. By improving the productivity of these areas, it reducers the pressures to clear new land for increased livestock and agricultural production. It also would help to reduce greenhouse gas emissions.

By increasing the productivity of pastures, ranchers and farmers can then convert some of their existing pastures to additional row crop production while still maintaining or even increasing their cattle production. It's a win-win situation and many Brazilian ranchers have opted to reduce their pasture acreage in order to cultivate more soybeans and corn.