With high production costs, government updates minimum price table for agriculture

The rise in fertilizer prices, due to the War in Ukraine, will put pressure on production costs for the 2022/2023 crops. This is what the National Supply Company (Conab) assesses after the release of the new minimum price table for the summer crop, released this Wednesday (6th) by the Ministry of Agriculture. The readjustments reach a high of up to 107%.

The minimum price for a 60 kg bag of soybeans went from R$ 55.55 in the 2022 harvest to R$ 96.71 in the new table, a variation of 77.24%. Corn grown in the Midwest, Southeast and South regions, with the same amount, will cost at least R$55.20, an increase of 76.13% compared to the price of the last crop, which was R$31 .34. Both readjustments will take effect in January 2023.

The superintendent of Market Study and Supply Management at the National Supply Company, Allan Silveira, explains that the minimum price policy is a law created to promote regular supply of agricultural products in Brazil. According to Silveira, the cost of production is the main variable used for the minimum price list.

Also according to Allan Silveira, some producers will feel this increase in costs more than others. This is because there are cultures that can be exported more and others that demand is from the domestic market, which makes it impossible to pass on the total costs to the distribution chain.

“The cost impact was mainly on crops that depend on fertilizers, so all crops such as soybeans, corn, rice, cotton lint, beans, use the product. Rice and beans, for example, which are mostly destined for the domestic market, have less margin for transfer. In other words, the producer will absorb this increase”, explains the superintendent.

The new price of black beans, for example, increased by 66.47%. The 60 kg bag went from R$ 126.33 to a minimum of R$ 210.30, which starts to be practiced in November this year. Rice had a positive variation of 44.53% in the 15 kg bag, going from 82.60 to R$ 120.45, valid from March next year.

The grain specialist at Safras & Mercado consultancy, Luiz Fernando Roque, explains that, in addition to the price of fertilizers, the world is in a cycle of high commodities due to the global economic scenario, a remnant of the Covid-19 pandemic and the war. in Ukraine.

“It is more expensive to produce a ton of agricultural bulk in Brazil. We import a lot of fertilizer and the currency is undervalued. Brazilian producers have spent more with each harvest and, to close the account, they have to sell at a higher price”, says Fernando Roque.