Brazilian producers to maintain excellent level of profitability, says Agroconsult

Date:12-08-2021

Despite the high production costs this year, Brazilian producers should obtain an “excellent level” of profitability in the 2021/22 harvest, said the president of Agroconsult, André Pessôa, on November 25, 2021, at the 40th meeting of the National Association of Cereal Exporters (Anec).

"Perhaps the profitability will be even a little above the 2020-21 crop," said Pessôa, referring to the dollar appreciating against the real, prices on the Chicago Board of Trade, the prospect of increased planted area and production of soy, corn and cotton, released during the online event.

The executive considered that the production costs of corn second crop tend to be affected by the high prices of fertilizers and some pesticides, which had a "very relevant increase" in the second half of this year. "We saw not only prices rise, but also signs of a shortage of products such as glyphosate, acephate and others," he commented.

For fertilizers, there is a line-up of “gigantic” ships, whose volumes are about to arrive in the country, according to Pessôa. “In general, I think the corn crop will pass without major problems (fertilizer supply). Cotton farming is a challenge because it uses a lot, a lot of input,” he warned.

"For the 2022-23 summer crop, I would say that we will have some problems, in terms of availability," he added.

2022/23 harvest

The rise in the prices of fertilizers, pesticides and even agricultural machinery should inhibit the expansion of the Brazilian agricultural area in the 2022-23 harvest, said Pessôa. “Production costs will increase a lot, which will reduce the speed of expansion of Brazilian agriculture in 2022-23. We will not see the areas of soy, corn and cotton growing in the same way as in the 2021-22 harvest,” said the consultant. “It will be a year (2022-23) of growth in planted area, but the rate of expansion will be lower due to the increase in production cost,” he asserted.

Pessôa also commented on the change in the regulatory framework for biodiesel, which, starting next year, will be marketed directly by producing companies with fuel distributors, and no longer through auctions.

“The return of B13 and B14 (of biodiesel blends in diesel in the proportion of 13% and 14%, throughout the year) is excellent news, but the change in regulation should draw the sector's attention. Adaptation is not so fast,” he commented. “It is going to mess a little with the soybean game. Soybeans have been crushed for two years to meet the oil demand first; if it were just for bran, it would not be necessary to crush as much soy as we do today,” he highlighted.