Agricultural production and yield estimation:

Two distinctive aspects of Brazilian agriculture and a perspective on world food problems

Abstract

Brazil has been increasing its importance in agricultural markets. The reasons are well known to
be the relative abundance of land, the increasing technology used in crops, and the development
of the agribusiness sector which allow for a fast response to price stimuli. The elasticity of
acreage response to increases in expected return is estimated for Soybeans in a dynamic (long
term) error correction model. Regarding yield patterns, a large variation in the yearly rates of
growth in yield is observed, climate being probably the main source of this variation which result
in ‘good’ and ‘bad’ years. In South America, special attention should be given to the El Niño and
La Niña phenomena, both said to have important effects on rainfalls patterns and consequently
in yield. The influence on El Niño and La Niña in historical data is examined and some ways of
estimating the impact of climate on yield of Soybean and Corn markets are proposed. Possible
implications of climate change may apply.