The recent issue of Fortune has a great article running down the growth of Brazil’s soy industry. Brazil is being very smart about building their industry; not only are they clustering farms, processing plants (for food, fuel, and chemicals), and animal feed operations, but they have spent the last few years designing and branding their product to capture Europe’s and the US’s high-end consumers, who want non-GMO soy. Big commodity handlers in the US have always said that differentiating a low-value product like soy isn’t worth it, so the market looked elsewhere to meet the demand.

Towards the end is the telling paragraph….

[The US industry's lack of response to the situation] condemns the U.S. to the role of “supplier of last resort – the high-cost, low-grade producer you buy from when you can’t buy the good stuff you want. That’s not a good position to be in.”

Despite record prices for grains of all types, it’s not a good time to be a soy farmer.