WASHINGTON, D.C., U.S. — An 11-day strike by hundreds of thousands of Brazil’s nearly 2 million truck drivers that began on May 21 continues to present transportation and logistics challenges for the country’s agricultural sector, according to a July 3 Global Agricultural Information Network (GAIN) report from the Foreign Agricultural Service of the U.S. Department of Agriculture.

The strike, which was spurred by rapidly rising fuel prices combined with the effects of the Brazilian real weakening against the U.S. dollar, caused estimated losses of $1.75 billion to Brazil’s agricultural sector, the USDA said. More than a month after the strike ended, the USDA said the country is battling delayed shipments of commodities, bottlenecks in supply chains, and disagreements over transportation policies and prices.

In the case of grains and oilseeds, the USDA said loading at some of Brazil’s largest soybean exporting ports ground to a halt during the strike, with trucks unable to deliver shipments due to roadblocks. Most export terminals ran out of soybeans for shipment about 8 days into the strike, the USDA said.

Additionally, ABIOVE, Brazil’s soybean crushers association, said all 63 of Brazil’s soy crushing facilities came to a halt during the strike due to a lack of supplies. Meanwhile, the Mato Grosso Institute for Agricultural Economics (IMEA) has reported that the corn harvest stalled out after fuel supplies ran low.

The impact on the industry has been severe since the strike ended.

Brazil infrastructure
“The aftermath of the strike and uncertainty about the minimum freight rate have stifled forward sales for soybeans, with traders complaining that they are unable to accurately set prices for futures contracts without a reliable estimate of transportation costs,” the USDA noted in the report. “As of late June, some of the country’s largest grain traders have virtually stopped buying soybeans and corn for export, even though IMEA reported that about one-third of Mato Grosso’s safrinha corn is still unsold. Grain and oilseed traders are also reportedly delaying picking up commodities from farmers’ storage facilities while they angle to avoid paying rapidly rising freight rates and wait to see what happens to the government’s minimum transportation price policy.

“This could be a major problem for a country whose agricultural producers have a lack of on-farm storage and will be faced with tough decisions of where to place safrinha corn.”

Citing information from Brazil’s National Association of Cereal Exporters, the USDA said about 10 million tonnes of soybeans were stuck in Brazil’s interior, while more than 50 vessels were waiting to be loaded at ports, as of mid-June.

According to the USDA, the backlog of ships at Brazil’s ports are not just waiting to load commodities for export, they also are waiting to unload shipments of agricultural inputs.