The prices of agricultural products soared in the countryside in the last three years. International demand, high external, drought and frost led to this scenario.
This increase occurs in a period of high unemployment rate and low consumer income.
This year will be another period of new challenges. For consumers, especially low-income consumers, to be able to put food on the table.
For the producer, face the new production costs coming, in large part, from abroad. In addition to inputs, money also became more expensive with higher interest rates.
Low-income consumers, who have already been reducing their consumption of basic items, will continue to experience supply difficulties.
The high prices of production inputs, quoted on the dollar, may remove part of the system’s small producers, especially those aimed at the domestic market.
In addition to not having the benefits of the dollar in export operations, such as what happens with the soy sector, these producers will have to pass on new costs to an impoverished population.
Beans and cassava practically doubled in price. Rice, after an acceleration last year, retreated, but is still 56% above the nominal values at the end of 2018.
The accumulated inflation from 2019 to 2021 was 21%, while food rose 35.5% in the period, according to data from Fipe (Institute for Economic Research).
The behavior of prices this year shows no signs of falling, as external demand remains unchanged. Even without new highs, the current level of prices, after successive increases in the last three years, is high.
It may even indicate less pressure on inflation indices, which compare average prices with average prices, but not on the consumer’s pocket, who has lost his purchasing power.
Consumers are being affected by the rise of all products, and most of these increases are yet to come.
The 245% rise in coffee in the field, the leader in the increase in this period, has not yet been fully incorporated by the industry.
Grains and proteins will continue to be exported, but this external demand brings new costs for national consumers, since the dollar is high, with no signs of a decline in an election period.
The harvest forecast for this year is a record, reaching 290 million tons. This volume is basically made up of soy and corn, which are already in irregular situations in some states, due to the weather.
The bean cultivation area in Paraná is being affected by drought. In parts of Minas Gerais and Goiás, however, excessive rain harms the harvest.
Meats had a strong price expansion in the last three years, due to Chinese demand. In 2018, the Asian country was affected by the African swine fever, which reduced the domestic production of pork, the main one in China.
The recomposition of the swine herd is not as fast as expected, which should guarantee Brazilian exports to that market this year.
The fat boi arroba, with the return of China to the Brazilian market, ends the year 2021 with record values, quoted at R$ 336.50, according to Cepea (Center for Advanced Studies in Applied Economics).
In addition to Chinese demand, Brazil is going through a period of reduced supply of cattle for slaughter, which may only have relief in the second half of this year.
As for producers, the reality of 2022 is quite different from the previous three years. Costs rose and, even with the maintenance of current commodity prices, the accounts should be taken at the tip of a pencil. Otherwise, they don’t close.
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