Opinion: The warehouse is geopolitical and Brazil hasn't realized it yet.

In March 2025, Beijing announced a budget of US$18,12 billion to stockpile grains, oils, and other food inputs, a 6,1% increase over the previous year. The official justification was straightforward: to prepare the country for "prolonged geopolitical tensions" and reduce dependence on external supplies. For China, grain reserves are a matter of state policy.

Brazil enters 2026 with the lowest storage capacity-to-production ratio in the last 20 years: 61,7%, according to estimates from the National Confederation of Agriculture and Livestock (CNA) based on data from Conab. For every 100 tons that the field will produce this harvest, there is physical space to store only 62. The question this data raises is not one of logistics, but of strategy.

National grain production has tripled in the last two decades, driven by the expansion of agricultural frontiers and significant gains in genetics and mechanization, but infrastructure has not grown at the same pace. Storage capacity has not kept up. The projected deficit for the current harvest is 135,4 million tons below the expected production of 353,4 million tons.

 Before using this number as a sole diagnostic tool, however, it needs to be calibrated. Brazil operates with at least two major harvests per year and without a harsh winter, which eliminates the need to store all production at once. The US, with a capacity equivalent to 130% of annual production, sizes its warehouses to get through off-season months that Brazil simply doesn't have.

The real problem lies elsewhere: in the absence of a detailed mapping of where bottlenecks exist and for whom investment in warehousing makes sense within the supply chain. Without warehousing, the producer delivers without the freedom to choose when to deliver.

The direct consequence of low storage capacity is documented and repeated harvest after harvest. Without anywhere to store the production, the producer is compelled to sell the grains immediately after harvest, at the moment when supply is at its peak and prices are at their lowest. This forced sale reduces their bargaining power with the large multinational trading companies that dominate the commercial chain.

The collective impact goes beyond the loss of individual profit margins. The concentration of sales within a short time window overloads trucks, port terminals, and train cars, increasing freight costs and creating congestion that raises costs throughout the entire chain. The producer pays twice: in the rushed sale and in the expensive freight. Those who have warehouses choose when to sell. Those who don't, deliver when the trading company wants to buy.

The most recurring narrative points to high interest rates as the main barrier to investment in storage. Credit exists, but the question is: how is it accessed? Sector data complicates this explanation. The Program for the Construction and Expansion of Warehouses (PCA), the main credit line of the Plano Safra (agricultural plan) for this purpose, has operated on average in recent years with only 64% utilization of available resources, according to data from FGV Agro reported by O Globo. The most revealing fact: this underutilization persisted even between 2018 and 2021, when interest rates were considerably lower.

If cheap credit wasn't enough to trigger investment, expanding the volume of the PCA (Product Acquisition Program) might be an insufficient solution to the wrong problem. The issue lies in the design of the instrument: who it's intended for, what guarantees it requires, and how it's distributed throughout the supply chain. A grain warehouse requires an investment between R$10 million and R$25 million, with returns spread over time. For large-scale cooperatives, the investment is viable and logically sound. For medium-sized individual producers, the numbers rarely add up without differentiated terms and guarantees. A storage policy that treats all agents the same way is an application of public resources without a diagnosis.

China has explicitly linked the increase in its food reserve budget to preparing for "growing geopolitical risks." Researcher Genevieve Donnellon-May of the Oxford Global Society summarized the logic: the goal is "to establish a minimum baseline to prevent reserves from falling to a certain level." In other words, food security as a state floor, not as an agricultural policy aspiration. Stockpiling is geopolitics.

The United States maintains storage capacity equivalent to 130% of annual production and includes direct financing for agricultural infrastructure for rural producers in the Farm Bill as an explicit component of competitiveness. The current context makes this debate urgent. In February, the Food and Agriculture Organization of the United Nations (FAO) food price index rose 0,9%, ending five consecutive months of decline, a movement driven by cereals, vegetable oils, and meats, with frost pressures in the US and Europe and logistical disruptions in the Black Sea. Conflicts in the Middle East, such as in Iran, continue to put pressure on fertilizer routes and disrupt supply chains.

In this environment, the ability to store grain has become a bargaining chip. Food-importing countries build reserves to defend themselves against supply shocks. Exporting countries, like Brazil, need storage to choose when to sell, not just to move what doesn't fit in the field. For the importer, the stockpile is a defense. For the exporter, it's leverage.

But how to change this? The first observation is that building an effective storage policy begins with knowing where the problem exists. A detailed national mapping of bottlenecks, by municipality, by crop, and by link in the chain, would allow instruments to be directed to the right point, instead of distributing credit in a fragmented way. Agricultural cooperatives are the agents with the greatest capacity and vocation to invest in collective storage. A differentiated policy for this segment has a direct multiplier impact on the associated producer.

The case of Coamo — a large agricultural cooperative operating in Mato Grosso do Sul, Paraná, and Santa Catarina, with 6,5 million tons of installed capacity and an expansion plan to 7 million tons by 2027 — illustrates how the cooperative model operates where individual producers cannot. The cooperative arrives before the trading company's truck. For medium-sized producers without access to consolidated cooperatives, consortium structures and public-private partnerships for shared warehouses can be more efficient than individual financing.

And the PCA itself needs to be revisited in terms of its requirements, deadlines, and eligibility criteria. The underutilization of 36% of available resources is a diagnosis that calls for a review of the instrument, not just the budget allocation. Brazil projects harvesting 353 million tons of grains this season, according to Conab. It has the soil, the climate, the genetics, and the producers. What is still lacking is a state policy that treats storage infrastructure for what it represents: not a logistical support structure, but an instrument for positioning in the global food market.

While China allocates billions to building strategic reserves and the US maintains capacity above production as a deliberate agricultural policy choice, Brazil produces for the world at a pace that foreign storage facilities allow. No other country exports so much food and depends so much on the market's clock to decide when to sell. It's worth asking how much this dependence costs, harvest after harvest.

About the author:

Patricia Arantes de Paiva Medeiros She is the executive director of the Brazilian Rural Society and a lawyer, holding a master's degree in Law, Justice and Impacts on the Economy from the Center for Studies in Economic and Social Law (CEDES) on competitiveness in agribusiness.

*The text above is the responsibility of the author and does not necessarily reflect the opinion of Insper Agro Global.

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