Commodities Shuttle: With drought, southern producers do not cover production costs, according to consultancy

Corn producers in Rio Grande do Sul will have a loss of R$ 2,200 per hectare in this summer crop, the worst result in terms of operating margin among the south-central states.

The producers of Goiás will have the best margin, estimated at R$ 1,800 per hectare, according to data from the consulting firm Céleres.

Average corn production costs doubled this year, reaching 59 bags per hectare. In the assessment of the consultancy, it was between R$ 6,500 and 7,700, depending on the state.

Goiás will have the best result on sales, with an increase of 21% in the margin this year, in relation to the previous harvest. Rio Grande do Sul will have the worst, with a retraction of 47%.

This value represents how much is left over from the revenue obtained, after deducting direct costs, which include seeds, fertilizers, pesticides, labor and others.

The consultancy evaluated the performance of Rio Grande do Sul, Santa Catarina, Paraná, São Paulo, Goiás and Minas Gerais.

The scenario for soybean producers in the South is not very different from that of corn. According to Céleres, those in Rio Grande do Sul, the state with the biggest drop in productivity, will have an operating margin of just nine bags per hectare.

In the South region, the margins will not be enough to cover fixed costs, and the most affected will be those who plant on leased land.

The break in the South, however, raises soybean prices. As a result, producers in Minas Gerais and Bahia will have an operating margin of 44 and 39 bags, respectively.

Field operating costs rose 86% this season, reaching R$ 4,700 per hectare. The reduction in productivity in the South, the appreciation of the dollar and the consequent increases in prices in Chicago, however, will increase soybean farmers’ income to R$9,100 per hectare, 72% more than in 2020/21.

As a result, high prices will guarantee a record margin of R$ 4,400 per hectare, 59% above the value of the previous harvest. A good result for those who had normal production.

Céleres reworked its soybean production forecasts and estimates only 125.8 million tons in this 2021/22 crop. The initial potential was 145.7 million.

For corn, the consultancy predicts 20.3 million tons in the summer crop, 27% less than expected. The country’s total crop, including the off-season, will reach 114.1 million tons, 32% above the 2020/21 volume.

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