Agriculture continues to inhibit the growth of the Brazilian GDP (Gross Domestic Product). Strong driver of the economy in previous years, the sector began to have serious problems with drops in productivity and production, due to climatic factors.
Last year, corn and coffee had intense losses due to drought and frost. This year, it was the turn of soybean production, the main national crop, to fall, also due to climatic factors, mainly those registered in the southern region of the country.
Agricultural GDP in the second quarter of this year had a retraction of 2.5%, compared to the same period in 2021. In the last four quarters, compared to the four immediately preceding, the accumulated deceleration reached 5.5%.
This year, two of the important products that weigh in the formation of the Brazilian agricultural GDP had a retraction in the harvest. Soybeans, which represent 45% of the total volume of grains that the country harvests, had a loss of at least 20 million tons.
National production was 119 million tons, according to the IBGE (Brazilian Institute of Geography and Statistics), well below the initially estimated potential, which was 140 to 144 million.
In IBGE calculations, the retraction in this year’s harvest, compared to 2021, was 12%.
The rice crop, also affected by the drought, dropped to 10.6 million tons, 8.5% below the 2021 volume. The crop in Rio Grande do Sul, the largest national producer, and which has irrigated crops, lost productivity due to to lack of rain.
This year’s agricultural GDP had in its favor, in this second quarter, corn and coffee. After an intense fall in last year’s second crop, the winter crop, the cereal was sown at the ideal time and did not have the negative influence of the weather as in 2021.
The most recent data from the IBGE indicate a total corn production of 112 million tons this year, 27% more than in 2021. The production of the second crop will be 38% higher.
Coffee production grew by 8.6%, mainly driven by the 9.6% increase in the volume of the Arabica product. The total harvest of arabica and conilon coffee is expected to reach 3.2 million tons, according to the IBGE.
The second quarter agricultural GDP was also affected by the reduction in milk production. High costs and reduced investments by producers caused a lower supply of product on the market.
Agriculture has accumulated a drop of 5.4% in the first half of this year, compared to the same period in 2021. For this second half, however, some positive factors will reduce this rate of decline.
In addition to the evolution of the corn and coffee crops, which progress through this period of the year, the wheat crop is record, and the cereal should reach, for the first time, 10 million tons. The IBGE estimates a 24% increase in the volume to be produced this year.
Planting areas did not undergo major changes, but yield behavior is essential for GDP performance. This year, soybeans lost 16% in the volume produced per hectare; and rice, 6%. Coffee, on the other hand, had a rise of 7%; corn, 16%; and wheat, 14%.
The super-harvest of 308 million tons, expected for 2023, could give a new rhythm to the sector’s GDP. That’s if the weather doesn’t interfere with production again, as it did with corn in 2021 and with soybeans this year.
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