The yerba mate sector faces pressure from prices and costs

The yerba mate sector, traditional in the South of the country, is going through a period of strong economic pressure. The combination of falling prices paid to producers, increased production costs in some regions, and an expansion of supply has put part of the production chain on alert. Faced with this scenario, the solution for the sector lies less in trying to control prices and more in seeking productive efficiency, income diversification, and opening new markets.

After a sharp rise in nominal prices at the beginning of the pandemic, prices have shown a downward trend in their nominal value, both for standing yerba mate and for yerba mate delivered to the industry. The price difference between these two forms of commercialization has remained relatively constant in Paraná, reflecting the constant costs of harvesting, marketing, and transportation of the activity.

However, all price reductions have been passed on to the producer, and since the price paid to the producer is lower, the result is a more pronounced percentage drop in the price of standing yerba mate than that delivered to the industry. In 2022, the price paid to the industry was approximately R$ 22,00 per arroba (@), and the price for standing yerba mate was R$ 17,00/@, with the difference attributed to the costs of harvesting, marketing and transportation (R$ 5,00/@).

In 2026, the price in the industry was approximately R$ 17,50/@, and for undamaged yerba mate, R$ 12,50. The difference between the two remained around R$ 5,00/@, but the percentage reduction in the price in the industry was 20%, and in the price for undamaged yerba mate, 26,5%. In other words, the price drop in the industry was fully passed on in absolute terms to the producer, since the costs of harvesting, marketing, and transportation remained the same, but because the producer's price level is lower, their percentage loss is greater. Meanwhile, Rio Grande do Sul has lower average nominal prices for yerba mate delivered to the industry than those practiced in Paraná, which has influenced the perception of the sector's viability.

Currently, the price of yerba mate per arroba (a Brazilian unit of weight) shows strong regional variation. In Rio Grande do Sul, producers report values ​​between R$ 16,50 and R$ 17,00 per arroba delivered to the industry, while in São Mateus do Sul (PR) prices remain at higher levels, between R$ 18 and R$ 20. The decrease is mainly attributed to the increase in supply, driven by the entry into production of new yerba mate plantations established in recent years, in addition to signs of a slowdown in consumption.

The reduction from R$ 22,50/@ (in 2021/22) to R$ 17,50 represents a decrease of more than 22% in gross revenue, without an equivalent reduction in production costs. In theory, this drop is almost entirely offset by the producer's margin. In a crop with high productivity and positive profitability, with high fertilization costs due to fertilizer prices, a 5% decrease in price in this scenario is already enough to compromise the profitability of the crop, and a 20% reduction in price compromises the ability to remunerate the cost of land and invested capital, and may even not generate enough income for the producer to maintain the cultivation practices of the yerba mate plantations at a high technological level. 

However, a well-managed yerba mate plantation with high productivity allows the producer to adjust costs related to cultivation practices during periods of low prices, reducing the impact of price reductions on the economic margin of the activity without a significant loss in productivity in the short term. In yerba mate plantations with low productivity, which typically operate with reduced or negative margins (many fail to recoup the opportunity costs of land and invested capital), the option to adjust the management level is quite limited, since costs and productivity are already at reduced levels.

At the same time, production costs have increased significantly. Fertilizer prices rose after the start of the war between Russia and Ukraine and have not returned to previous levels. Harvesting and transportation costs have also increased dramatically, both due to rising fuel prices and labor costs. The cost of these operations went from R$ 460 per ton (R$ 6,90/@) in 2020 to R$ 820 (R$ 12,30/@) in 2026, representing a 78,3% increase compared to an inflation rate of 39,6% during the same period, impacting production costs by more than 50%. 

The situation particularly affects producers who sell the herb "on the plant," as the price received already includes discounts related to harvesting and transportation. This makes the reduction in profitability even more significant.

In this context, one of the main discussions within the production chain involves the relationship between productivity and excess supply. Some speculate that incentivizing increased productivity will worsen the crisis by further expanding the availability of raw materials and pushing prices down.

However, our assessment points in a different direction: productivity gains are fundamental to the individual economic survival of the producer, especially during periods of low production. The logic is that more efficient systems can reduce the average cost of production and maintain a positive margin even in adverse scenarios.

Increased productivity comes from increased efficiency and economies of scale, which can contribute to reducing production costs on the farm. It also opens up opportunities for contracting services with lower average costs, increasing contract volumes and reducing transaction costs. However, for producers to continue participating in the market at these new production levels, the search for new markets and the development of other yerba mate products are fundamental. Along these lines, more competitive prices for the end consumer could also stimulate market expansion and open up opportunities for new industrial uses of yerba mate, beyond the traditional chimarrão, mate tea, and tereré.

Another important point is the difference between technologically advanced producers and those who only enter the activity when the crop is more valuable. More structured producers are better able to manage periods of crisis, temporarily reducing management costs without drastically compromising future production. The key here is the combination of technology and management working together.

Producers considered "adventurous," attracted only by high price cycles, tend to abandon the activity when prices fall. This is observed in other agricultural activities, such as pig farming, tobacco farming, and poultry farming. A similar trend occurs in the yerba mate sector.

The economic management of the yerba mate plantation is also central. Financial analysis tools, such as economic planning applications developed by Embrapa for the yerba mate supply chain, should be used to assess whether maintaining the activity remains viable, whether it is possible to reduce production costs, or whether the producer should replace the crop. Decisions should always be based on planning, studies, and analysis.

In addition to productive efficiency, diversification is also a strategy to reduce risks. One alternative is the adoption of integrated systems, such as the intercropping of yerba mate with Araucaria, fruit trees, and forest species. The aim is to mitigate economic risks, expand income sources, and add environmental value to production. The overall result for the property is fundamental.

It is also necessary to invest in quality, traceability, and sustainability to expand the presence of Brazilian yerba mate in the international market and in higher value-added segments. The crop's environmental potential, including ecosystem services and carbon storage, as well as tools for measuring carbon emissions and stocks in production systems, can be highlights of the production chain in adding value.

Discussions within the sector still reveal points of tension, such as the interpretation of production data. However, it is important to point out that the use of the term "bumper crop" to describe the current situation is misleading. The recent increase in supply is more linked to the recovery of yerba mate plantations after periods of drought in Brazil and Argentina and the influx of raw materials from pre-pandemic plantings than to a technological leap in productivity. Productivity has been growing at a slow pace after years of decline.

Certainly one of the current points of tension is the distribution of profit margins along the production chain. While companies attribute the crisis to macroeconomic factors and increased operating costs, producers raise doubts about a possible growth in industrial margins at the expense of the price paid in the field.

It is worth highlighting that yerba mate is a long-term perennial crop. Therefore, fluctuations are expected over time, but the recovery of capital invested in establishing the yerba mate plantation occurs gradually with each harvest. Thus, short-, medium-, and long-term planning is fundamental so that the producer can develop production strategies that align good profits during periods of high prices with balancing accounts during more adverse times, enabling the good financial and productive health of the enterprise throughout its production cycle.

Despite the adverse scenario, yerba mate production remains a strategically important economic, environmental, and cultural activity for the Southern region. However, the recommendation is for the sector to move towards more efficient, diversified models focused on adding value, reducing its exclusive dependence on the fluctuations of the traditional market.

It is worth highlighting and drawing attention to the fact that yerba mate has great potential for increased demand in Brazil and worldwide, with sustainable production and a significant quantity of bioactive compounds for use in various products across diverse areas. International interest in yerba mate has intensified in recent years. In Brazil, however, there are still paths to be explored, such as attracting the interest of new types of industries to this raw material, using more aggressive and continuous marketing strategies, especially in non-consumer regions, greater organization of the sector, and working in partnership. 

On the other hand, the first signs are already appearing that the return curve may be reversing in the coming years, and in this sense, it is expected to be a good time for those who want to invest in the crop, provided they plan ahead, adopt technologies, and avoid adventurous strategies. Not all technological improvements have a cost, but they can have a significant impact on production. Therefore, producers should also prepare for a new upward cycle by seeking low-cost adjustments with a good effect on production.

Science and technology in yerba mate cultivation.

In the context of supporting improvements in quality and productivity, research institutions and universities have been working with yerba mate, providing rural producers with technologies to assist in their daily work. From Embrapa Florestas, we highlight:

• High-yielding, standardized-quality clonal cultivars 
• Technologies for producing high-quality seedlings
• Erva 20 production system, for increasing productivity and quality of yerba mate plantations, with appropriate management strategies.
• New production systems
• New products seeking added value and access to new markets.
• Matte Management: a system for diagnosing and evaluating the quality of yerba mate plantations.
• Ferti Matte: support system for herb nutrition
• Planin Mate: a system for economic analysis of yerba mate plantations.
• Carbon Matte: carbon calculator for yerba mate

Economic importance of yerba mate

Yerba mate ranks 2nd among Non-Timber Forest Products (NTFPs) in terms of production value from plant extraction in Brazil, and third when considering agricultural production. In plant extraction, it is second only to açaí (42,2% of the VBP in 2024), with 21,6% of the VBP in 2024, consolidating itself as the main non-timber product of the forestry agribusiness in the Southern Region. Considering agricultural plantations, yerba mate ranks 3rd among non-timber forest products, surpassed only by açaí (67,6% of the VBP) and rubber (14,11% of the VBP), with a share in the production value of 2024.

*Per Ivar Wendling e José Mauro Moreira, researchers from Embrapa Florestas, and Ives Goulart, analyst at Embrapa Florestas