After record, grain harvest declines in 2024, year of El Niño – 10/10/2023 – Vaivém

After this year’s record, the Brazilian grain harvest stops rising. The first survey by Conab (National Supply Company) for 2023/24 indicates production of 317.5 million tons. If confirmed, the volume will be 1.6% lower than the 322.5 million in the previous period.

Climate and price will be two of the main important factors in changing the direction of some products. Soybean production continues to climb and could reach 162 million tons, 4.8% above the volume of the previous period.

Corn, however, drops to 119.4 million, a drop of 9.5%. Rice production, the third product on the list of most important, will increase in area and volume. Rice, corn and soybean crops represent 92% of Brazilian grain production. Coffee is not included in this calculation.

Conab forecasts the next harvest based on the potential of each product, using area and historical productivity estimates as a reference. This, however, is an El Niño year, when there is an excess of rain in the South and a reduction in other areas of the country. The severity of these occurrences will determine the volume to be produced.

Profitability is being decisive for producers’ options in this upcoming harvest. The 5% drop in the corn area is due to the drop in domestic cereal prices. The 5% increase in rice is due to the increase in the price of a bag of the product above R$100.

Soy continues the trend of recent years and will have a record area of ​​45.2 million hectares, with the possibility of producing 162 million tons, maintaining Brazilian hegemony in this market.

The drop in corn prices allowed soybeans to occupy part of the area that would have been allocated to this cereal in the 2023/24 harvest.

The rise in rice prices guarantees that the cereal will regain part of the area it had lost to soybeans in recent years. The irrigated rice area grows by 5.8%; and rainfed, 2.4%. In the Northeast, the increase will be 18%. Rice production rises to 10.8 million tons, estimates Conab.

The total corn harvest declines due to a 5% drop in both area and productivity. The second harvest of the cereal, the so-called second crop and the country’s main one, will have an average productivity of 5,561 kg per hectare, 6.5% less than this year. As a result, winter production, after reaching 102 million tons this year, drops to 91 million next year.

One of the objectives of the current government is to increase stocks of basic products. Rice, with production increasing to 10.8 million tons, is expected to rise to 1.85 million between this harvest and the next.

The final volume of beans is close to 500 thousand tons, in Conab’s assessment. If the goal is reached, it would be the largest stockpile in a decade.

Smaller wheat and corn harvests, unlike what happens with rice and beans, will reduce carryover stocks from this harvest to the next.

Next year’s exports will lose strength in corn, but gain in other products. The government predicts that 38 million tons of cereal should leave Brazilian ports in 2024, far from this year’s record of 52 million. Cotton, rice and wheat, according to initial forecasts, will maintain stability in exports.

The increase in soybean production to 162 million tons will allow an increase in foreign sales, which could reach 102 million tons of grains next year. Those made from bran are estimated at 21.5 million, and those made from oil, at 1.9 million.

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