Drought impacted Brazil soybean and corn productivity in 2021/22 harvest: CNA

The lack of rains hampered the development of soybeans and corn, mainly in the Southern region and in Mato Grosso do Sul, in the 2021/2022 harvest, according to the results of the production cost surveys of the Campo Futuro Project.

Data from the production chain of cereals, fibers and oilseeds (soybean, corn, wheat, rice and beans) were presented during a live debate promoted this week by the Confederation of Agriculture and Livestock of Brazil (CNA).

In the debate, CNA's technical advisor, Tiago Pereira, said that the regions analyzed were influenced by weather conditions, mainly drought in the 2021/2022 cycle. ″The escalation of input prices and geopolitical conflicts also interfered in the conduct of activities.″

The researcher at the Center for Advanced Studies in Applied Economics (Cepea), Mauro Osaki, presented the main results of Campo Futuro this year. According to him, the Effective Operating Cost (COE) of the regions analyzed for the five crops increased in the 2021/2022 harvest, compared to the previous cycle. Fertilizer was the main item that weighed on the COE.

Soybean

Concerning soybeans, Mauro informed that the drought hampered the grain development in Rio Grande do Sul, Paraná, Santa Catarina and Mato Grosso do Sul. ″The drought caused great losses in Tupanciretã (RS), for example, which registered a productivity of 13 bags per hectare and a negative gross margin of R$2,400 per hectare,″ he said.

Corn

According to the data presented, the drought also affected the results of summer corn in the South region. Leafhopper attacks were also a factor that impacted production.

In the first season, the cost of insecticide increased by 21%. According to the researcher, the average price of corn increased by 13% in the 2021/2022 summer crop, but the average gross revenue fell by 7% in the same period. This retraction is due to the 20% drop in productivity. The COE was 31.1% higher compared to the 2020/2021 season.

Wheat

The results of the surveys reveal that the average price of wheat rose in the 2021 harvest compared to the previous one, but this advance was incompatible with the increase in production costs, such as the COE, which advanced 34%. Among the eight regions surveyed, four recorded gross revenue above the Total Operating Cost (TOC), especially Campos Novos (SC).

Rice and beans

The lack of rain reduced the water availability in the reservoirs, negatively affecting rice productivity. First, crop bean production also suffered from the lack of rain.

Among the three typical farms evaluated for rice production in Uruguaiana (RS), Camaquã (RS) and Tubarão (SC), the two typical farms in Rio Grande do Sul presented the lowest profit margins due to the higher disbursement with fertilizers.

Agricultural markets

AgResource Brazil Managing Director Rafael Mandarino also participated in the live debate and spoke about unknown situations that face the world’s agricultural markets. These include the great economic restart underway (as European, American and global inflationary pressures increase), in addition to the Russia-Ukraine war and the South American drought, which have produced the biggest global grain supply shock since 1914.

For Mandarino, China and the United States (US) are at a political crossroads, and the global and US recession emerges as another factor of attention amid the banks' struggle to control inflation.

Mandarino also spoke about food inflation in the US; global consumption of corn, wheat and soy; Ukraine's corn exports; Russian exports and monthly global wheat sales; Brazilian foreign sales of corn and the annual variation in world demand for corn.