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Brazil’s transportation costs up, making U.S. beans more competitive

A grain marketing consultant says transportation issues continue in Brazil as trucking costs jumped one and a half percent Sunday.
Dr. Michael Cordonnier with Soybean and Corn Advisor tells Brownfield, “This is always the peak demand for trucks in Brazil during the soybean harvest, so this is actually good news for the truckers but not good news for the farmers. So, they’re going to have to pay a higher freight rate which makes them so, even more uncompetitive.”

Cordonnier says Brazilian farmers still rely heavily on trucks to move crops to market… for now. “Sixty percent of the products in Brazil go by truck. Now that is going to go down and the rail part is going to go up, but not immediately because you’ve got to build the railroads, and all that sort of stuff, so it’s going to be a couple of years down the road.”

Cordonnier says farm organizations have been promoting more rail, and it’s something Brazil’s new President supports.

710-miles of new and expanded railways are planned from the highly-productive Mato Grosso region to a river barge terminal costing about four billion U.S. dollars. (12.6 billion Brazilian dollars) The new railway additions and improvements are expected to move eight million tons of grain annually, and reduce the cost of Brazilian commodities with lower transportation costs.

Brazil also has a minimum mandatory trucking freight rate, which is under review by their Supreme Court.