Commodities Shuttle: Harvest is record, but production of grains and basic proteins worries

The IBGE and Conab announced, this Wednesday (8), a record grain harvest for 2022 and a good advance in meat production in the first quarter of this year.

The numbers, good for exportable products, however, leave a concern in relation to basic foods, especially in this period of high inflation and low consumer income.
Soybeans showed a better performance in the final stretch of the crop, and production will be 124 million tons, but still below the initial forecasts of 145 million.

The safrinha corn, which is being harvested, also has better productivity, points out Conab. The country’s total production will be 115 million tonnes, 88 million tonnes being harvested in the winter season.

Due to the good share of these two products in national production, the grain harvest for the 2021/22 period is expected to reach 271 million tons, 26 million more than in the previous year, when crops were affected by drought and frost.

The IBGE showed that meat production (beef, pork and chicken) totaled 6.84 million tons from January to March, 4% more than in the same period in 2021, when comparing the weight of carcasses.
In both the grain and protein sectors, however, there is less exciting data, especially when looking at ending stocks.

Rice, in the final stretch of the harvest, registered a lower productivity than expected, and this year’s harvest is 10% lower than the previous period.

Final cereal stocks fall to 2 million tons in this harvest, 20% less than in the previous one, shows Conab.

The beans in color, also affected by the weather, had a fall of 9.5% in the first harvest. Conditions are better in the second, but production is expected to fall in the third. Ending stocks, forecast at 350,000 tonnes, are now estimated at 251,000.

Another product of consumer concern will be wheat. The country is expected to finish the 2021/22 commercial crop at the end of July, with just 188,000 tonnes.

The average ending stocks over the previous five years was 2 million tonnes. Brazil consumes 1.06 million tons of cereal per month.

The world crisis in the supply of wheat and the rise in prices caused an increase in area in the country. In addition, a recovery in productivity is expected, which should increase the national production of this crop, which is still being sown.

In Conab’s accounts, it will be 8.5 million tons. In the IBGE, 8.9 million. As a result, July 2023 ending stocks would rise to 771,000 tonnes.

In the protein sector, two basic products lost strength in the first quarter of the year: milk and eggs. The IBGE points out that egg production dropped to 977 million dozen in the period, 2% less than in the first quarter of 2021.

Milk production fell by 10%, with uptake by industries falling to 5.9 billion liters from January to March.

With lower production, these two products weighed on the consumer’s pocket and registered a greater participation in inflation.

In the meat sector, IBGE data point to a good performance. The slaughter of 6.96 million cattle yielded 1.84 million tonnes of meat based on carcasses.

The good production, however, was channeled to the foreign market. Exports of 469 thousand tons of meat “in natura” corresponded to 33% of the volume in carcass, a record for the period, according to the IBGE.

Chicken meat production rose to 3.76 million tons, up 2.3%, and swine slaughter reached a record level of 13.6 million animals. Pork production increased by 7% to 1.24 million tonnes in carcass weight.

The good moment of pork production, however, did not represent revenue for the sector. Exports declined due to lower demand from China, forcing domestic prices down in a period of high costs.