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Changes coming in BRIC nations

DANIEL LOOKER 02/23/2012 @ 5:53pm Business Editor

BRIC is an acronym for four of the world’s fastest developing nations Brazil, Russia, India and China. BRIC could also be a building block for dramatic changes in world agricultural markets, both as new outlets for U.S. products and competition.

That’s the impression left Thursday by a panel of trade experts who spoke at the USDA’s Agricultural Outlook Forum in the Washington, DC area.

No group of four people would possibly predict the future of trade with these four big and complex countries. But they gave some tantalizing hints of possibilities. Here are some:

Could Brazil become a competitor in corn exports as well as soybeans?

Seneri Paludo of the Mato Grosso Farm Bureau in Brazil told a standing room only crowd that more pasture land in the his state is being converted to soybeans and that there’s a lot of room for double cropping corn after soybeans. Of some 47 million acres of cropland, only 2 million is currently planted to corn.

Seneri Paludo of the Mato Grosso Farm Bureau in Brazil

But as cattle move off pasture and into feedlots, Brazil is feeing more corn and soybeans to a domestic market. When a new highway is opened from Mato Grosso north to the Amazon, corn prices for farmers will likely rise and Brazil will be able to export corn, or beef, more efficiently. It also opens up Brazil’s fastest growing consumer market in the Northeast, what was once the one of the poorest regions in that country. Paludo told Agriculture.com in an interview later that in the short run, the transportation corridor to the north will likely increase exports but in the long run the bigger market may be in Brazil’s Northeast.

“The internal market is growing in Brazil, just like in China,” Paludo said earlier.

He sees Russia a potential growth market for Brazil’s beef exports.

Russian could be an even better market for the U.S. as well, now that it’s been approved for joining the World Trade Organization, said Eric Trachtenberg of McLarty Associates in Atlanta, Georgia.

The former USDA trade authority said that from 2006 to 2011, consumer spending on food in Russia has grown by 114%, thanks to Russia’s petroleum-driven prosperity. Russia already imports food, with as much as 70% of the raw materials for some meat processing plants coming from outside of the country. Russia is already the fourth largest export market for U.S. poultry, fifth for beef exports and sixth for pork, Trachtenberg said.

Once Russia formally joins the WTO, probably in August, its phytosanitary rules on meat imports should become clearer and tariffs and quotas will start to drop.

Yet, when he was taking questions from the audience, Trachtenberg shared some doubts, too.

Russia’s government has made a commitment to the WTO, he said. “The question is, how deep that commitment is.”

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