Brazil should have a record harvest in 2022, but costs will be the highest in history

Brazil must have a harvest record for grains in 2022. The expectation of the National Confederation of Agriculture and Livestock (CNA) is for a production of 289 million tons, 14% more than the 2021/22 harvest.

But to increase productivity, the farmers will have one of the highest costs in history. The consequence? Production expenses should flatten the overall profit.

In 2021, the rural producer has already lived with an increase of more than 100% in costs with fertilizers and pesticides for crops such as soybeans and corn and the trend is for this scenario to remain in 2022.

For CNA, another factor that deserves attention is the performance of the Brazilian economy. Uncertainties in the economic world should influence the agribusiness next year.

Because of this, the expectation is that the Gross Domestic Product (START) of agribusiness to grow at a slower pace, remaining between 3% and 5% below what was registered this year. Compared to 2020, the agribusiness GDP should close with an expansion of 9.37%.

For the Gross Production Value (VBP), which measures the revenue “from the gate to the inside” in agriculture and livestock, CNA expects the increase in revenue to occur at a slower pace compared to previous years.

The VBP should reach BRL 1.25 trillion in 2022, growth of 4.2% compared to 2021. Crops such as coffee, corn and wheat should have higher production and sugarcane, coffee and cotton should have an increase in the prices. On the other hand, soy, beef and rice should suffer a drop in the Gross Production Value.

Exports record

From January to November 2021, Brazil moved US$ 110.7 billion in exports, surpassing the previous record registered in the whole year of 2018, when the values ​​reached U$ 101.2 billion. In comparison with 2020, the growth was 18.4%.

The main products exported were soy in grain, in natura beef, raw cane sugar, soy bran and in natura chicken meat. The main destinations were China, the European Union, the United States, Thailand and Japan.

Together, these five markets accounted for 62% of consumers who purchased Brazilian items. The country where the greatest expansion of foreign sales in 2021 was registered was Iran (71.3%), with revenues of US$ 734 million.

For 2022, the CNA indicates some factors that need to be monitored, such as the behavior of the Covid-19 and the emergence of new variants, the bottlenecks of maritime transport, the global supply of inputs, the environmental agenda and international trade.

According to the confederation’s estimates, China should remain the main commercial partner of Brazilian agribusiness.