Understanding the reason for the decline in agricultural GDP in the third quarter | agricultural business

Compared to the same period in 2020, the sector decreased by 9% and helped push It is 0.1% Bruno’s GDP (Gross Domestic Product) For the period, reported on Thursday (2) the Brazilian Institute of Geography and Statistics (IBGE).

The main reasons were:

• a dry that dropped coffee crops, oranges, sugar cane and corn;
• a Decrease in Cotton Production: Producers prefer to grow grain rather than lint because of the good prices of soybeans and corn;
• reduce slaughter Wood back.

On the other hand, consult experts before g 1 Claiming that climate improvement should aid farming performance in the last three months of the year, with emphasis on wheat production.

NS The third trimester is usually a weaker period for agribusiness., regarding the second quarter, says economist Renato Conchon, of the Federation of Agriculture and Livestock in Brazil (CN).

This is because wine Soybeans and corn،, two of the main cereals exported by Brazil, are concentrated in The first and second trimesters of pregnancy, respectively.

The lack of rain that hit the countryside from the second half of 2020 until the beginning of this spring not only delayed the harvest of the two beans, but also affected important crops that occur between July and September, such as coffee, sugar cane and oranges.

Despite the delay, soybeans recorded another record harvest this year and corn was the hardest hit, with production down 16.4% in the 2020/21 season, compared to the previous harvest.

Conchon says the grain harvest, which usually takes place in the second quarter, ended up “dumping out” for the following months.

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Already producing coffee, It will naturally be lower this year because of the Biennale of CultureIn the even year, the yield is high, and in the odd year, the yield is low. Along with dehydration, Culture still suffers from frost effect during the winter.

But for Kunchun, the frost will have a greater impact on the upcoming harvest, because the climatic shock harmed the development of the plant.

Cotton, in turn, lost the area planted in the 2020/21 crop due to good grain prices. “The producer did the math and saw that corn and soybeans were more profitable,” says the CNA economist.

Another reason was the delay in harvesting grain. “The window has gotten shorter, and therefore, growing cotton has become more dangerous for the producer,” says Cesar Castro, agribusiness specialist at Itaú BBA.

Given these factors, according to IBGE, There has been a decrease in the estimated annual productivity of the following crops:

• Cafe (-22.4%),
• cotton (-17.5%);
• corn (-16.0%);
• orange (-13.8%);
• sugar cane (-7,6%).

Bovine farming also affected poor farming results in the third quarter, Castro assessed, from Itau.

This is because livestock slaughter fell 11.1% in this period, compared to the third quarter of 2020, according to IBGE data.

“This was because of the livestock cycle itself,” Castro says. “Producers keep cows in response to good prices for calves. So, we have a few cows being slaughtered.”

For Conchon, or China’s ban on beef exports from Brazil was Moderate impact on agricultural results for the third quarter and should have a greater impact in the last three months of the yearThis is due to the decrease in the number of massacres.

According to Rebecca Pallis, national accounts coordinator at IBGE, the Chinese suspension affected “a little” the performance of exports from July to September, which was down 8% compared to the three months immediately prior.

What to expect in the future

Despite the negative outlook for livestock, The improvement in the climate helped the performance of agriculture in the last three months of this year.

One of the highlights of this period is wheat harvest That, in Itai’s forecast, 23% more this season compared to the previous seasonThanks to the good weather conditions.

In addition, much of the wheat has been directed to animal feed due to the high prices of corn and soybeans. This factor, added to the frustration with harvesting grain in countries such as the United States, Canada and Russia, has kept wheat prices high, even as domestic supply has increased, says Castro, of Itau.

However, in the bank’s forecast, agribusiness GDP should close the year with a 0.8% decline, after a 3.8% rise in 2020.

Analyst José Carlos Hausknecht, direct partner at MB Associados, expects a 1% decline in the sector this year.

“It is true that the soy yield was very good, but this drought problem is still very serious,” Hausknecht says.