Agri-input prices more than double in 2021, increase costs for 2022 in Brazil

The escalation of input prices was the main reason for the increase in agricultural production costs in 2021, after the value of some fertilizers and pesticides accumulated highs that surpassed 100% in the year until September, also indicating higher expenses for 2022, the Confederation of Agriculture and Livestock of Brazil (CNA) said on Thursday.

Among agrochemicals, glyphosate leads with an advance of 126.8%, the CNA said, based on the results of the Campo Futuro project. The increase was mainly due to operational interruptions in industries that manufacture the input in China and the supply of raw materials.

"According to the producers' report, there was a shortage of the product in some regions, causing concerns that go beyond the increase in cost."

The main indicator analyzed in the Campo Futuro project was the Effective Operating Cost (COE), which included inputs (fertilizers, seeds and pesticides), mechanical operations and agricultural sales.

In addition to inputs, the CNA highlighted the fact that the weather also affected some agricultural activities, citing the impacts of droughts that occurred in the second half of 2020 and early 2021.

In coffee, for example, the Effective Operating Cost of the Arabica type increased by 15% compared to the survey carried out in 2020. The COE of Conilon rose by 31.3%.

On the other hand, there was an increase in revenue (marketing price of the product in the period versus production) of 54% for Arabica coffee and 35.4% for Conilon coffee. According to the CNA, the appreciation of grain prices resulted from lower world supply and logistical problems for the flow of the crop in producing countries, such as Brazil.

For 2022, the expectation of the confederation is an even more significant increase in costs with agricultural inputs, which could negatively impact the margin of coffee growers.

The Campo Futuro project is an initiative of the CNA/Senar System, in partnership with Cepea/Esalq, Labor Rural of the Federal University of Viçosa, Pecege of Esalq/USP and the Market Intelligence Center of the Federal University of Lavras.