Vaivém: Despite the high cost, agriculture will be profitable in 2023

Even with the acceleration of input costs for agriculture this year, the net margin of producers, in relation to operating costs, should be positive in 2023.

The rate should not repeat the good level of recent harvests, but will be positive again. The estimates are from Conab (National Supply Company), based on a statistical model that takes into account the upper and lower lines of prices paid to producers and production costs.

Allan Silveira dos Santos, superintendent of Market Studies and Supply Management, says that the sector will have profitability, but less than 2021, when it was excellent.

That year, commodity prices rose rapidly, due to strong international demand. Already the costs of inputs have been increasing gradually, but accelerated this year.

The Conab superintendent says that now, with commodity prices more stabilized and costs higher, the net margin of producers should return to the pre-pandemic period.

Profitability should continue because the supply of products is not abundant. Ukraine’s difficulties in producing and exporting continue. In addition, the United States maintains low inventories and still has a crop scenario with some uncertainties, due to the weather.

China, which has a more industrialized production, expands the agribusiness in the country and has been increasing corn purchases. The country is the world leader in soybean imports.

Thus, the year 2023 should be a period of rebalancing inventories. Only in the next harvest, in 2024, the market would be more supplied and comfortable, says Santos.

In the price and cost scenarios outlined by Conab, only rice should have a drop in net margin in 2023. The decline would be 1%. The agency released data on rice, cotton, beans, corn and soybeans.

Soybeans and corn, based on information from Mato Grosso, should reach positive margins of 23% and 7%, respectively. Cotton, on the other hand, has 43%, and beans, with 29%.

In meat, profitability should be lower than in grains. Poultry farming, when Conab considers a neutral behavior of prices, but low costs, can reach a positive margin of 2%. In a scenario of neutral prices and high costs, however, there will be a negative margin of 22%.

In pig farming, the occurrence of neutral prices and low costs would give a net margin of 7% to the sector. In the same price scenario, but with high costs, the loss would be 18%.

Cattle should have a slightly more comfortable scenario, according to Conab’s calculations. Neutral costs and low prices would generate a net margin of 46%. In the case of neutral prices and high costs, the margin would be positive at 2%.

Grains in Paraná The Deral (Department of Rural Economy) of Paraná made the first estimates of the 2022/23 harvest in the state. After a period of climate crisis, productivity is growing again in the region, and the volume of grains is expected to increase by 68%.

Soy The great recovery occurs in soybeans. The planted area is up only 1%, but the potential for productivity is 3,752 kg per hectare, which should generate a production of 21.5 million tons in the state, 78% more than this year.

Corn The cereal sown in the first crop loses area, but the state’s production rises to 4 million tons, 34% more than in the 2021/22 period. The gain comes from the recovery in productivity, which is 42% higher than in this year’s crop.

smaller area In addition to summer corn, rice and beans lose ground to soybeans. The corn area drops 6%; beans, 12%; and dry rice, 16%, according to Deral’s first estimates.