How Agricultural Commodities Influence USA-Brazil Relations

 Brazil has become a direct competitor of the United States in the world crop market over the past twenty years. Many US farms and agricultural manufacturers have moved their operations to Brazil to take advantage of the fast-growing industry. This is because Brazil has a lot of land, the prices of land are low, and there is a lot of sunlight and natural resources. In the middle of the 20th century, Brazil became the biggest producer and seller of coffee, which marked the start of its rise to fame as a farmer. By the end of the century, soybeans had become Brazil's main product, and they were worth more. Today, Brazil grows about a third of the world's oranges and is one of the best places to raise cattle because it has a lot of land for grazing in the south. But the weather is what really draws farmers to Brazil. Brazil is the biggest exporter of corn from September to January because it doesn't get cold there in the winter. This lets farmers grow a second batch of corn.


Brazil's longer corn export season has a big effect on the prices of corn, soybeans, and other crops grown in the US. According to a study by the USDA, Brazil is a market that farms and the companies that serve them want because it is competitive, has a lot of natural resources, and has a lot of room to grow and expand. Statista recently published a story that says about one-third of Brazil's land is used for farming. Brazil is one of the biggest countries in the world by area, so there is a lot of farms to choose from and it is very cheap. In 2012, farmland in Brazil would sell for $500 to $1,500 an acre, which was much higher than the $12,000 to $15,000 figure that US farmland sold for. Al Jazeera talked to Phil Corzine, a farmer from Illinois who moved his soybean growing business to Brazil and had a lot of success there. "I never thought I'd be running a farm in Brazil like this." "I've come a long way since the beginning," Corzine said. "For a lot less money, I can buy a lot more land down here..." So price and access are what make us do what we do. Farmers are always looking for cheap ways to make a lot of food. In Brazil, where the growing season is long, it's easy for them to buy land that can be used for farming, chemicals, and tools. Because of this, Brazil has become a more important farming exporter. This makes markets around the world want their goods and gives farmers peace of mind that their crops won't go to waste.


As with other goods, farmers must fight on a global scale with free trade. This means that the companies that make their tools and parts must also do so. Equipment makers can't always make goods that are accepted around the world because of local rules and customer preferences. That's why manufacturers of farm equipment should be ready for local customization. In response to the needs of Brazilian farms, manufacturers from North America have also started moving south to better serve them. Globe Newswire says that in 2018, John Deere, AGCO, and CNH sold almost 90% of all tractors and combine harvesters in Brazil in the country. "Made in the USA" is a social seal of approval that makes people in the US proud and excited. Pivot International says that items made in the United States are of high quality and mean more jobs for Americans and fair working conditions. American producers are known for being open about how they make things, and making things in the United States speeds up delivery and turn-around times for North American companies. Making things in the US means lower shipping costs, more payment choices, and better protection of intellectual property. Even with all of these big benefits, domestic manufacturing is rarely cost-competitive because workers are required to be paid a minimum wage and production is limited by factories that aren't set up to handle high volumes of work efficiently.


The TMF Group says that US manufacturing businesses should go to Brazil because it is a great place to start expanding into South America. "The country is still a very appealing place for companies from all over the world to invest today..." In the 1990s, 66% of people living in rural areas and 38% of people living in cities in Brazil were poor. There is a great chance for US companies to do well in Brazil if they make connections and learn about the society and businesses there. In a "Custo Brazil" society, however, doing business in Brazil means going through a lot of hoops. People say that Brazil's tax system is one of the trickiest in the world. Management Study Guide says that the Brazilian government can tax any good that wasn't made in Brazil at a very high rate. This makes it hard to buy good equipment because a lot of it isn't made in Brazil. Also, the government has put high taxes on foreign capital goods, which are paid for by Brazilians with low incomes. In places where salaries are highly taxed and people can't just hire people whenever they want, taxes also play a big role in labor laws. People also think that Brazil has one of the worst infrastructures because of its huge government debt and people who are deeply in debt. "Custo Brazil" is a polite way of saying that Brazil's finances are in terrible shape. A lot of Brazilians can't afford to live a normal life, and they are known for taking out loans to buy things they need because they can't afford to otherwise.

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