BRASILIA, BRAZIL — Brazil is expecting record-setting wheat and corn harvests in the 2023-24 marketing year, but its rice crop is forecast to be the smallest in 25 years due to a prolonged drought in its key production region and low profitability for farmers, according to a Global Agricultural Information Network report from the Foreign Agricultural Service of the US Department of Agriculture (USDA).

Corn production is forecast at 133 million tonnes, up 6% from the estimated 125 tonnes in 2022-23, the report said.

“With high demand for corn both domestically and internationally, farmers remain optimistic about continuing planting, resulting in an increase in expected planted area next season,” the USDA said. “However, Brazil’s logistic burdens, lack of storage facilities, and transportation challenges methods, aligned with higher production costs, remain a hurdle that could hamper the country’s production numbers.”

Wheat also continues to gain the interest of Brazilian farmers, with growing investment in technologies, including new drought- and pest-resistant varieties. The USDA forecasts production in 2023-24 at 11 million tonnes, up from the estimated 10.6 million tonnes this year. Area harvested also is projected to set a record at 3.2 million hectares, up from 3.1 million in 2022-23.

“The possibility of an increase in international demand for wheat, taking advantage of space left by severe crop problems in Argentina and the war led by Russia in Ukraine, and the decrease in production costs are factors that have increased the optimism of Brazil producers toward the 2023-24 wheat harvest,” the USDA said.

Conversely, the drop in rice production projected for 2023-24 is due mainly to a reduction in planted area and drought in Rio Grande do Sul, the main rice-producing state, the report said. Output is forecast to fall to 10.13 million tonnes, down from 10.3 million in 2022-23.

In addition, lower profit margins have discouraged farmers, who have been turning to more profitable crops such as soy and corn.

“Rice consumption is also likely to decline, with Brazilians changing eating habits to fast foods and less time-consuming preparations,” the USDA noted.

Brazil is projected to be the world’s third largest corn producer in 2022-23 behind the United States and China, and to move into first place in corn exports, ahead of the United States, at 50 million tonnes, according to the USDA.