Rice and beans lose space in crops for grains used in animal feed

The double rice and beans is one of the favorites of the Brazilian table, but it has less and less space in the fields. Year after year, it loses area to other grains such as soy and corn, two of the main Brazilian agricultural commodities destined for export.

With the advance, Brazil reduces the production of food for people and increases the production of what will be transformed into animal feed, especially pigs and poultry, and in cooking oil in food industries located mainly in China, in the case of soy, and in Iran, with maize.

China was the destination, until November 2022, of 68.3% of Brazilian soybean exports. Foreign corn sales in the same period, according to Secex (Secretary of Foreign Trade) of the Ministry of Economy, went to Iran (17% of the total), Japan (11.8%), Spain (11%) and Egypt ( 10.4%).

The result, for the internal market, is inflationary.

In addition to losing area, beans and rice for domestic consumption also suffer from the increase in exports of these grains. Good for those who produce and are negotiating in dollars and positive for the trade balance, foreign sales can be bad for those who go to retail to buy their packages of 1, 3 or 5 kilos of these foods.

Professor of international economics at FEA-USP (Faculty of Economics, Administration and Accounting at the University of São Paulo) Simão Silber says that these foods have also faced, since 2015, a reduction in demand as a result of inflationary surges that tightened purchasing power of Brazilians.

“With no money, the consumer migrated to other foods such as pasta. He had to change his diet for budget reasons, because his income does not fit the resistance dish, rice, beans and some meat”, he says.

The IBGE’s POF (Household Budget Survey), which measures what Brazilians are consuming and serves as a reference for the inflation basket, showed a drop in the consumption of rice and beans in 2017 and 2018 compared to 2008 and 2009. frequent use of rice increased from 84% to 76.1%, and beans, from 72.8% to 60%.

This reduction forced by lower purchasing power also dampens the interest of those who produce. In Rio Grande do Sul, where around 70% of rice production is concentrated, at least 500,000 hectares have been turned over to soy in the last two years. There are still those who started to plant corn or wheat and raise cattle.

“Soy has a future market. The producer already knows how much he will sell for and the cost per hectare is half that of rice. From R$ 6,000 per hectare with soy, he spends R$ 12 thousand with rice”, says Alexandre Velho , president of Federarroz (Federation of Rice Growers Associations of Rio Grande do Sul).

This year, rice production in Rio Grande do Sul should be 100,000 hectares less than last year (from 950,000 hectares to 850,000 hectares), precisely because of the greater attractiveness of crops destined for export.

External rice sales also rose. From January to November, the increase is 371% compared to the same period last year. According to the representative of the rice farmers, the exchange rate favored Brazil, leaving Brazilian rice cheaper than that produced in the United States, which is sold mainly to Mexico and other countries in Central America.

In October, 30,000 tons of paddy rice (one that has not yet been processed in the industry) were purchased by Mexico.

Velho admits that the combination of factors such as the allocation of areas for soy and livestock and exports can generate price pressure, that is, increase the amount paid by the final consumer. He argues, however, that Brazilian rice is cheap compared to production in other countries and is of superior quality.

“It can bring price pressure, but it is still cheap. If there is a price realignment, it will be small, it will go from R$ 4 per kilo to R$ 4.40”, he says. According to the IEA (Institute of Agricultural Economy), linked to the Secretary of Agriculture and Supply of the government of São Paulo, a kilo of rice accumulates a high of 5.44% until November 2022 and cost R$ 4.94.

The case of beans is even more complicated, especially for those who care about the carioca type. With no external market for this variety, producers grow less and less one of the favorites of local consumers. From January to November 2022, carioca beans accumulate a 19% increase. In 12 months, the increase is 15.84%.

In São Paulo, on December 8, a bag of carioca beans reached R$ 415, according to Ibrafe (Brazilian Institute of Beans and Pulses). On the same day, black beans in Minas Gerais cost R$290.

Marcelo Lüders, president of the institute, doesn’t see much of a way out of the carioca-type dilemma. The way, in his assessment, is for the consumer to open up to other variations, such as the gust (which looks like the carioca). Around 60% of consumption in the Brazilian domestic market is still carioca beans.

And this variety still faces a second disadvantage, the loss of area for commodities, which affects all types of beans. The total planted area of ​​beans in Brazil in the 2022/2023 harvest, including all varieties, will be, according to projections by Conab (National Supply Company), the lowest since 1976.

The company’s estimate is 2.7 million hectares destined for beans; 46 years before, they were 4.5 million hectares. In the same period, productivity improved and, therefore, the loss of planted area did not represent a reduction in production. However, the evolution, in almost 50 years, is almost insignificant. From 2.2 million tons in the 1976 harvest to 2.8 million in the 2022 harvest.

Ibrafe projects that the final number of this year’s harvests will be below Conab’s projections. The result has a similar origin to what has been happening with rice: the commodity market is more stable and profitable than working with beans.

Foreign trade in commodities is what Silber, from FEA-USP, considers a “very well-established market”, which has been structuring itself since the end of the 2nd World War, with a high technological level.

“You bring the perspective of future harvests to the present, something that gives a lot of stability to buyer and seller, and we don’t have that in traditional cultures”, he says. Trade flow, according to the professor, also represents a choice made by agribusiness many years ago, to prioritize international trade.

In an attempt to improve market conditions and encourage the production of varieties with good international receptivity, the bean institute defined a series of strategies for this and next year. The possibility of exporting, says Lüders, gives the producer a safeguard that even if domestic consumption refuses, there is the possibility of selling the production.

Among the sector’s bets is the receptivity of the growing vegan and vegetarian market, in which beans and other pulses, as they are called lentils, peas and chickpeas, are considered important sources of protein.

This year, the entity wanted to hold an event along the lines of the Rally dos Sertões –named Rally dos Feijões– during which it would promote business roundtables, lectures and discussions on the market in cities in the interior of Mato Grosso, an important production hub. Scheduled for early November, had to postpone the event.

At the time, said Lüders, agro in Mato Grosso was at a standstill, afraid to plant, and mobilized in anti-democratic acts against the result of the October 30 elections.

According to Conab, in a November bulletin, the area planted with beans in Mato Grosso was reduced by half, “mainly to the detriment of the corn crop”. In 2021, Brazil recorded a record in the export of cowpea (also known as macassar, fradinho or cowpea), the second most produced in the country.