Brazilian agribusiness GDP has a record growth of 24.31% in 2020

The Gross Domestic Product (GDP) of agribusiness grew 2.06% in December and closed in 2020 with a record expansion of 24.31%, as against 2019, according to the Technical Communiqué of the Confederation of Agriculture and Livestock of Brazil (CNA) and the Center for Advanced Studies in Applied Economics at the University of São Paulo (Cepea).

As a result, the agribusiness share in the country's total GDP increased to 26.6% last year as against 20.5% in 2019.

All segments of the Brazilian agribusiness production chain, in general, increased in 2020, with emphasis on the primary sector (56.59%), followed by agroservices (20.93%), agribusiness (8.72%) and inputs (6.72%). The performance of the agribusiness GDP reflects the evolution of the sector's real income, in which variations in both volume and real prices are considered.

Both, the productive chain of agriculture (24.2%) and livestock (24.56%), had a significant expansion in 2020. In the agricultural part, the highlight was the movement of high prices and the increase in production, with a record harvest of grains and growth in the supply of coffee, sugarcane and cocoa.

However, the CNA and Cepea point out that, despite the record GDP result last year, the agricultural production chain is still recovering from an adverse scenario in previous years. In the primary sector (activity within the gate), for example, real income decreased 20% from 2017 to 2019, despite 20% growth in production in the same period in the face of unfavourable prices.

According to CNA, the intense use of pre-sale of grains also contributed to the fact that most producers did not benefit from the sharp rise in prices throughout 2020, in addition to the increase in production costs.

With the livestock sector, the increase in the prices of animal proteins as against 2019 and the expansion of the production and slaughter of pigs and poultry and the offer of eggs and milk reflected in the result of last year in the GDP. But the sharp increase in production costs has negatively affected margins within the gate and in the agribusiness.

"In addition to the feed inputs, which significantly increased since the grains operated at record levels, in the case of beef cattle, the high elevations of the calf and lean cattle, should also be highlighted," CNA explained.