With a super harvest, the field should inject R$ 1.25 trillion into the economy this year – 03/13/2023 – Vaivém

The field should inject R$ 1.25 trillion this year into the Brazilian economy with activities inside the gate. The crops, with the super harvest, will show growth of 8.9% in the financial volume, which could reach R$ 888 billion.

Livestock, on the other hand, due to the fall in cattle prices, will have the third consecutive year of loss of income. The financial result within the gate will be BRL 362 billion in this sector, 3.4% less than in 2022.

The data are from the Ministry of Agriculture, which monitors the volume and prices obtained by producers. Despite reaching a record level, 2023 revenues forecast this month are still lower than those projected in February.

Conab (Companhia Nacional de Abastecimento) readjusted downwards the production of some important items for this year’s harvest. One of them was soy, whose production, in view of the drought in Rio Grande do Sul, was revised to 151.4 million tons. The previous estimate was 152.9 million.

As a result, the ministry lowered the revenue forecast for oilseed producers to R$ 387 billion, less than the R$ 401 billion forecast last month. Even so, the financial movement of soybean farmers with this year’s sales will exceed by 14% that of 2022.

Current soybean prices are lower than a year ago, but the volume produced makes up for this drop.

José Garcia Gasques, responsible for the data collected by the ministry, says that two points are important for this year’s VBP (Gross Production Value). One of them is prices, which, despite the reduction in some cases, are still above the historical average.

The ministry representative also highlights the increase in average productivity, close to 10% this year, which, even when there is a reduction in area, guarantees good production.

Reduction of planted areas and droughts have promoted important changes in the VBP ranking. Among the states, Mato Grosso remains the leader, followed by Paraná and São Paulo. Rio Grande do Sul, in view of the continuous adverse climatic effects in the region, lost strength and is in fifth place in the national ranking.

The gauchos lost ground in important crops, such as soy, corn and rice. Soybeans and corn are still preferred by producers in the state, but the weather has not cooperated with production.

Rice loses ground to other crops. If the forecasted data for this year are confirmed, the production of the cereal will be the smallest of the last 25 years in Brazil. The state is the main national producer.

Lower production and stable prices at R$ 85 per bag made rice lose its place in the ranking of national importance, obtaining lower revenues even than cassava.

Brazilian agricultural production moved quickly to the Midwest, whose region should accumulate R$ 387 billion in revenues this year. Next come the South region, with BRL 331 billion, and the Southeast, with BRL 298 billion.

The country remains dependent on few products. Revenues from soy and corn represent 62% of all those obtained from the 17 products analyzed by the ministry in the crop sector. If sugar cane is added, the participation of the three rises to 73%.

In livestock, cattle and chicken account for 68% of the sector’s total revenue. The retraction in these two segments affects the entire sector this year.

Crop income estimates are based on a record harvest of 310 million tons. This volume, however, may still undergo major changes, mainly due to climatic effects.

In some cases, such as wheat, Conab still considers the 2022 numbers for the current calculation. This year’s volume, however, should not reach last year’s record. The IBGE, which already has a forecast for wheat, estimates a reduction of 14% in this year’s harvest, compared to 2022.

The domestic prices of agricultural products are under less upward pressure this year. The international scenario, however, still brings many uncertainties.

Russia and Ukraine will have to renew the grain export agreement in the coming days. Without the renewal, the difficulties of world supply are accentuated, affecting prices.

The definition of internal prices, which serve as the basis for the formation of the VBP, also depends on that of external prices.

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