American farmers are fascinated with Brazilian agriculture. What happens with crops in Brazil matters to U.S. grain markets. Iowa native Matthew Kruse, who farms with his family near Royal, Iowa, also farms in Brazil.

Kruse, who is a regular columnist for Farm Futures, has spent time managing thousands of acres of farmland in the frontier of Brazil. He knows the crops, infrastructure and the outlook in Brazil as well as anyone.

Having managed more than 22,000 acres of corn, soybeans and cotton in Brazil, there are many questions Kruse can answer: How do you obtain land and begin farming in Brazil? What is the growing season like? What is the outlook for crops this season in Brazil?

The Farm Progress podcast — FP Next — powered by John Deere, set out to answer these questions recently in a Deep Dive episode.

Burning questions

Gleaned from the podcast, here are some of the questions Kruse answered, giving insights on the cropping systems in Brazil and how they are evolving.

How did you get interested in farming in Brazil and how did you begin your operation there? My first trip to the country was in 2001. I was getting ready to graduate from Iowa State University. I didn’t know much about Brazil. Literally, in my first six months, I walked around with a pocket dictionary. No one spoke English where I was, only Portuguese, so there was no choice but to learn the language. I learned a few words each day, and after 100 days, I started forming the basis for the language.

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Cheap land and labor and our quest for opportunities is what got us down there. This was when corn prices were depressed, maybe $2 or less per bushel. It seemed like land was expensive in Iowa then — maybe it wasn’t compared to now — but for that time. You could purchase land at one-tenth or one-fifteenth the cost of land in Iowa. It looked like more of an opportunity, rather than just bidding up on rent locally and working through very narrow profit margins.

My father started CommStock Investments, and as a commodity adviser for the firm, I was watching the market and saw the major growth factors in Brazil. I was reading a lot about Brazil. The country was all the rage in the early 2000s. My father was the one who came up with the idea to farm there and got us started in Brazil. It still took a lot of capital, even with cheap land. We paid around $800 per acre in the beginning. Some land was cheaper yet. But it cost several hundred dollars more per acre to develop the land. A lot of the value in land down there was tied up in development.

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It could take you five to 10 years and millions of dollars to get to the point where the land is developed for production. It is a different system than here in the U.S. Our soils are fertile and much higher in organic matter. In Brazil, soils are less than 1% organic matter, and the natural pH of the soils is 4 or less. So, everything you need to get a good crop, you have to put into the soil.

Today, just to develop Brazilian land, you have to add lime and phosphate, for instance. It may cost more than $1,000 per acre just in development. If you are talking 80 acres, like we have in Iowa, that is one thing. But if you are talking about 8,000 or 80,000 acres like in Brazil, you have to write million-dollar checks. There is no financing, so you are paying for this out of pocket or out of cash flow and profits.

When we went there, Brazil was producing 35 million metric tons of soybeans. Now, it is five times that at around 156 million metric tons. The growth in that country in soybeans has been done without financing, so that is impressive.

What are crop conditions right now in Brazil and how does the corn crop get integrated into their cropping systems that are based on soybeans? After the first-crop soybeans, there is a little time after harvest during rainy season. There’s no snow or frost. The temperatures don’t change that much. Their big concern is running out of rainfall.

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Brazilian farmers plant corn behind their first soybean crop. They look more at the second crop of corn as a rotational crop. That second crop corn represents 77% of Brazil’s total corn production. About 20 years ago, it was close to nothing. Now, 77% is in that second crop. The crop itself may only yield 100 bushels per acre or less, so yields are not that great. But the corn crop benefits the next soybean crop. Since soybeans is the main cash crop, it is followed and rotated with corn.

In the Mato Grosso region, they plant 30 million acres of soybeans. They plant 60% of those acres with a second crop of corn, so they aren’t even planting 100% of their soybean acres to corn. What if they increase yields and plant more of that to corn? They are experimenting with planting corn sooner to boost yields, so there is more time in the rainy season.

The challenging thing is that it pushes the first crop of soybeans sooner. So, rather than planting soybeans in October, they are planting in September. It worked out last year, and they got corn planted earlier behind the soybean crop. But this past year, rainfall took longer to get started. The second crop corn went into good conditions. Mato Grosso is the largest corn-producing region by far. If they have their corn in by Feb. 20, after that it starts to get late, and they run a much higher risk of entering the dry season.

To listen to the entire podcast with Kruse, and other episodes of FP Next, visit farmprogress.com/program/fp-next.