Shuttle: Crop will be fat, but with smaller margins, points out consultancy

Among the ten main relevant points for agribusiness this year, Céleres consultancy highlights a reduction in the profit margins of producers.

After two years of highs, the sector returns to a phase of normal margins, both for soy and corn, warns the consultancy.

Two factors will weigh on the sector’s liquidity: product prices and costs. The perspective is for stable or even lower prices for the period, which contrasts with costs, which rose to another level due to the increase in inputs.

Producers in the mid-north of Mato Grosso should obtain 60 bags of soybeans per hectare. With the increase in direct costs and other expenses, the operating margin drops to 12 bags in the 2022/23 harvest. In the previous one, it had been 28.

Corn producers in the same region must obtain 125 bags. After direct costs and other expenses, the margin will be 46 bags, below the 67 for the 2021/22 crop.

The consultancy highlights, however, an improvement in Brazilian logistics in relation to that of the main competitors producing grains in the country.

The expansion of the output of grains through the ports of the so-called Arco Norte and new stretches of railroads equals costs to those of other countries.

Changes in the regulatory framework of ports and railways also alter the dynamics of the sector, according to Céleres.

Brazil gains new markets and takes a greater diversity of products abroad. This makes possible investments in logistics in the flow of grains and in the importation and distribution of inputs.

The global performance of 2023, however, points to a scenario different from that of recent years. Demand may remain heated, but external prices retreat. Lower growth in the Chinese economy and geopolitical risks should affect the agricultural market.

In the assessment of the consultancy, the soybean crop should not suffer major influences from the weather, which will allow corn to be planted in the appropriate period.

After so many uncertainties in the supply of fertilizers at the beginning of 2022, the country ends the period with 12 million tons of final stocks. High prices, however, worsen the exchange ratio of producers.

The consultancy also points out that recent years have shown an acceleration in the production of biological products and special nutrition for plants. This evolution will continue over the next ten years, reaching an annual average increase of 20% to 25%.

Céleres also points to a consolidation movement in the distribution chain of inputs in Brazil. New adjustments will come in the coming years.

Agricultural production gains strength, and the new occupation of the area will be on the 19.8 million hectares of degraded pastures.

Prices The year 2023 begins with accelerated food prices. The first quadrissemana of Fipe (Fundação Instituto de Pesquisas Econômicas) points to a rate of 1.09% for food.

Prices 2 This pressure, the highest since July of last year, is mainly due to the increase in prices of fruit and vegetable products, affected by excessive rainfall in several producing regions. Vegetables rose 8%; and vegetables, 5% in the period.

Prices 3 Consumers also feel in their pockets the readjustment of basic items in their daily diet. Rice had readjustment of 4.2% in the last 30 days, and beans, of 7.1%, according to monitoring by Fipe.