The concern about the lack of inputs for Brazilian crops that arose at the end of last year — even more accentuated with the war between Russia and Ukraine, last February —, ended up not being confirmed.
The country had the inputs, although with prices much more expensive than in previous years. Data from Imea (Instituto Mato-Grossense de Economia Agropecuária) indicate that, on average, funding costs rose 67% in this 2022/23 harvest, compared to the previous one.
There are increases, however, of up to 120%, when some products are considered in isolation. This occurred mainly in the fertilizer sector, where there was a drop in production and a reduction in supply, initially caused by the pandemic and, subsequently, further aggravated by the war in Eastern Europe.
These market uncertainties did not, however, prevent a new acceleration in the area of soybean planting, the main Brazilian agricultural product.
Consultancies that have already made planting forecasts for the 2022/23 crop of the oilseed indicate an area close to 43 million hectares. Last year there were 40.9 million, according to Conab.
Cleiton Gauer, Imea’s superintendent, says that the increase in area is not as optimistic as it was last year in Mato Grosso, when growth reached 10%, but despite all these adversities, it should grow by 2.9%. .
According to Imea’s calculations, farmers in Mato Grosso, the main soybean producing state in Brazil, will sow 11.8 million hectares, with an estimated production of 41.5 million tons.
This evolution occurs because many farmers, encouraged by the good profitability of the crop in recent years, were already preparing for an increase in area.
Those who left it to make this decision later reduced the pace of planting, given the high production costs.
Gauer states, however, that the production estimate is based on an average over recent years. The climate, however, is quite uncertain, which can generate different impacts in the various micro-regions of the state.
As of September 15, producers in Mato Grosso are allowed to start planting soybeans. By the end of July, 93% of the inputs used in the fields, such as fertilizers and pesticides, had already been sold.
A recent drop in soybean prices in Chicago, higher costs in the field and the expectation for better prices in the market made the producer put on the brakes on anticipated sales of soybeans that he still has to sow.
According to Imea, only 25.5% of the oilseed is already traded, the lowest level for this period of the year in the last five harvests.
This year’s soybean prices are good, but they do not bring the same liquidity as in the previous crop, when costs were lower. “The producer awaits the move [dos preços] and goes on doing what is necessary”, says the Imea superintendent.
One of the main concerns of the producer is the balance between world supply and demand. A large harvest, but with a reduced demand, would be the worst scenario, since production costs are being high, says the Imea superintendent.
In this harvest, operating costs, including costs and post-harvest expenses (transport and others), reached R$ 6,268 per hectare. The cost of funding alone —basic inputs such as seeds, fertilizer and agrochemicals— total R$ 4,909, according to Imea.
“It’s a crop that required much more investment, and it’s time for the producer to be more efficient and have good management of his business”, says Gauer.
Data from Imea indicate that a purchase of inputs in the worst price scenario has a difference of up to 68% in relation to the product purchased at the most favorable moment.
The producer will not always get this negotiation moment right, but the management will certainly improve profitability, says Gauer.
Stonex and Safras & Mercado consultants estimate an area of 42.9 million hectares of soybeans and a crop of over 150 million tons. According to Stonex, which projects the biggest harvest, Brazilian production should be 152.6 million tons.
AgRural and S&P Global Commodity Insights estimate areas just over 42 million hectares. In the case of S&P, production could reach 149.5 million tons.
AgRural, which should redo estimates of area and production in the coming weeks, forecasts a harvest of 146.3 million tons.
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