Grains may have ‘worst harvest in history’ with high inputs; understand
- June 1, 2022
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A rural producer for ten years, Fabrício Maestrello for the first time will have to reduce the area planted with soy in harvest to be sown in September.
Of the 1,200 bushels (something close to 3,000 football fields) that he normally cultivates in the Paranacity region, northwest of Paraná, he will plant half of the crop. The reason for the cut was the rise in prices of inputs.
“The increase was much greater than the appreciation of the grainit is a business that you enter in debt”, he says.
The three villains of rising costs, according to the producer, are the fertilizer, defensive and fuel. This year, Maestrello paid R$ 6,200 per ton of fertilizer, 120% more than in the last harvest. For the liter of herbicide, he paid R$90, four times what he spent in 2021. Not to mention the diesel used in tractors.
“It used to cost R$4 a liter and now it’s almost R$7.” In the period, the Soy in the futures market rose about 40%.
The strong input cost pressure faced by Maestrello is the reality of farmers Brazilians who are going to plant the most expensive crop in history, according to surveys from several institutions.
The war between Ukraine and Russia, the latter one of the main exporters of fertilizers for the Brazil and the energy and logistics crisis in China, where the pesticide factories are located, in addition to the rise in diesel, have driven input prices soaring.
Grain cost pressures sound like a warning sign for a food inflation “commissioned”, which may or may not take place in 2023, depending on the market situation at the time of marketing the crop.
Where the Harvest is worse
In the accounts of the National Confederation of Agriculture and Pecuária do Brasil (CNA), the average expenditure in the country to produce one hectare this year is expected to grow 45% for soybeans and almost 50% for corn compared to the previous year.
“It may be that the cost is even higher”, emphasizes Maciel Silva, coordinator of Agricultural Production at the CNA. It’s just that, at this moment, not all inputs were purchased and, therefore, are subject to high prices, he says.
However, the increase in costs in specific and consolidated regions in harvest of grain exceeds the national average calculated by the CNA. The increase in spending on inputs for the next soybean crop varies between 60% and 70% in the north of Paraná and Mato Grosso in relation to the previous one, point out the Cocamar cooperative, from Maringá (PR), and the Mato-grossense Institute of Agricultural Economy.