August 30, 2022

 

Brazil's grain, oilseed harvest in 2022/23 to hit 308 million tonnes

 

Brazil's CONAB anticipated that the country's 2022/23 grain and oilseed harvest would reach 308 million tonnes, due to positive performance and strong international demand for corn, soybean, rice, beans and cotton.

 

"Despite the increase in production costs, the crops still have strong liquidity and represent good profits for Brazilian farmers," said Guilherme Ribeiro, CONAB's president. As shown in CONAB's Preliminary 2022/23 Agricultural Prospects report, these factors have contributed to allocation of more soil to soybean, corn and cotton crops, he pointed out.

 

The five crops, which make up more than 90% of Brazilian grain production, are estimated at 294.3 million tonnes.

 

For soybeans, CONAB pointed to a record production scenario. The projection is 150.36 million tonnes for the next season. Prices should remain attractive as world supply and demand for the oilseed remain tight. This reflects a growing trend of 3.54% of the area for the crop, reaching 42.4 million hectares.

 

For corn, a total production of 125.5 million tonnes is expected. The area reserved for corn crops is likely to decrease by 0.6% during the first annual harvest since it coincides with the soybean cultivation period. However, with a possible recovery in yields — and after suffering from insufficient water in producing regions in 2021/22 — total crop could reach 28.98 million tonnes.

 

In the second harvest of the grain, an increase in both area and productivity is estimated, resulting in a yield of 94.53 million tonnes, an expansion of 8.2% compared to the 2021/22 harvest.

 

As for the animal protein market, meat producers, especially poultry and pork producers, are faced with the challenge of managing production costs, given higher corn prices. In this scenario of high costs, the tendency is for a lower profit margin in the sector.

 

In the case of pig farming, another factor to be considered is the recovery of Chinese herds hit by African swine fever from 2018 onwards. The disease has had an impact on domestic live pig prices. Naturally, decreased infection rates are leading to a reduction in exports to China.

 

"However, with the opening of new markets, such as in other Southeast Asian countries and Canada, the effects of this decline tend to be minimised," said Allan Silveira, CONAB's Market Studies and Supply Management chief.

 

The trend in 2023 is towards an increase in slaughters of around 6.7%, which should not fully translate into an increase in protein production due to lower animal average weight projected due to high feed costs.

 

Poultry slaughters are expected to increase by 3.2% in 2023 compared to this year, reaching 6.29 billion chickens, while exports are expected to fall by 1.7%, reaching 4.5 million tonnes. This combination of factors results in a probable increase in domestic supply of 4.2%, increasing availability per capita of around 51kg/inhabitant/year.

 

Despite a favorable external market situation, beef breeders are facing rising costs, mainly due to recent increases in the price of calves. In response to this price hike, breeders developed a strategy to retain female animals, which could explain the expected increase in herd figures for 2022 and 2023 and, consequently, the increase in slaughter rates in the upcoming months, up 2.7% from 2022 (30.1 million cattle heads).

 

The increase in slaughter also indicated a 2.9% increase in beef production, owing to the possibility that in 2023, the process of culling cows (typical of the current stage of the livestock cycle) will begin, allowing for an increase of around 5% in sales to the foreign market and a slight increase in per capita availability in 2023.

 

- MercoPress