Commodity Shuttle: Agricultural companies gain trade balance, but cut consumer and producer pockets

The high prices of agricultural commodities increase the trade balance of the main exporting countries. Behind this account, however, producers’ incomes narrow and consumer expenditures increase. The bonanza is over, and the account doesn’t close.

The numbers of the two main countries participating in the world food market, the United States and Brazil, indicate the agricultural leap.

The latest USDA (United States Department of Agriculture) data estimates a record $191 billion in exports in fiscal year 2021/22 (October to September).

Two years ago, when Donald Trump still thought he owned the world and interfered in the American agricultural market, exports stood at just US$ 139.7 billion.

The numbers of the Ministry of Agriculture of Brazil are not far behind. The most recent data, referring to the last 12 months ending in April, registered exports of US$ 133 billion, 33% more than two years ago.

In recent years, the producer has taken advantage of this great evolution of prices, obtaining good income. The scenario has changed, and consumers will continue to pay high prices for food and farmers will be able to move to negative margins.

This Tuesday (31), Usda released two important data that show the performance of the sector: the evolution of prices received by producers and the increase in production costs. The situation does not differ from that of Brazil and indicates a completely different scenario from what had been happening.

In April, North American producers received 28% more for their products, compared to the same month in 2021. In the case of grains, the increase was 17%. In meat, 40%.

Costs, however, came in heavy, up 17% in the last 12 months. Average food prices remain at high levels, both in the United States and in Brazil, and the rise in costs is expected to last for a long time.

As well as Brazilian producers, North Americans suffer the brunt of the evolution of energy, fuels, fertilizers and chemicals. The sector was not used to such high numbers.

Over the past 12 months, fertilizers have risen an average of 71% in US fields. For this crop that is being sown, the sector was already prepared, but these costs will weigh even more heavily on the next one. Just like in Brazil.

Fuels rose 61% in 12 months; agricultural machinery, 21%; and chemicals, 16%. The country’s average inflation in the period was 8.3%.

In Brazil, where costs follow a similar pattern to the United States, prices rehearsed a fall this month. Of the 12 main agricultural products monitored by Cepea (Center for Advanced Studies in Applied Economics), only three had an increase in relation to April: cotton, wheat and rice. Coffee kept prices stable.

The main falls last month were those of meats. The swine retreated 23%, and the chicken and beef were 4% cheaper.

Wheat, still influenced by the international market turmoil, ranging from drought to war, became 11.5% more expensive in the Brazilian market last month, according to Cepea.

Wheat The planting reaches 61% of the area that will be destined to the cereal in Paraná. In the assessment of the Deral (Department of Rural Economy), 98% of the crops are in good condition.

harvest The area falls, but the productivity increases. The people of Paraná should sow 1.17 million hectares with wheat, 4.3% less than in the previous harvest.

crop 2 The productivity rises to 3,309 kilos per hectare. Under normal weather conditions, the state should harvest 3.9 million tons, estimates the Deral.

safrinha The corn harvest reaches 2.4% of the planted area in Mato Grosso, according to Imea (Instituto Mato Grosso de Economia Agropecuária).

safrinha 2 The sown area was 6.32 million hectares, with a yield potential of 104 bags per hectare. As a result, Imea estimates a harvest of 39.5 million tons, up from 33 million in the previous period.