Agribusiness cycles: strategies to ensure the sustainability and competitiveness of the sector

The agricultural sector is marked by cyclical movements that influence economic trends and scenarios. Understanding this dynamic is essential for producers, investors and everyone involved in the agribusiness chain, as it reflects on market behavior and dictates the strategies to be adopted to guarantee the sustainability and competitiveness of the sector.

The agricultural machinery market, for example, presents cycles that are related to economic conditions and the demand for food. During periods of high demand and high prices for agricultural commodities, producers invest more in technology to increase productivity, which results in an expansion in the agricultural machinery market. However, when commodity prices fall or there is economic uncertainty, demand for new machines decreases, resulting in a period of market accommodation.

Fleet renewal is essential to increase efficiency and profitability in the field. Brazil is the only country in which producers can have up to three harvests per year in some regions, which requires the continuous use of agricultural machinery. However, a significant part of this fleet has already exceeded 15 years of use, resulting in greater wear and tear, which compromises the competitiveness and sustainability of production. With the advancement of technologies, updating equipment becomes essential for producers to increase productivity and maximize profitability. This scenario reveals great potential for the renewal of agricultural machinery.

The entry of new generations into the field tends to accelerate the cycle of technological renewal. Young producers have shown greater interest in updating machinery, seeking to reduce costs, optimize the use of inputs and increase efficiency and profitability in operations. This movement governs agricultural behavior throughout the country, from north to south, but is particularly visible in agricultural frontier regions, such as Matopiba (Maranhão, Tocantins, Piauí and Bahia), where fleet modernization has advanced rapidly.

Agricultural cycles are also noticeable in harvests and their results. Climatic conditions vary from year to year, directly impacting crop productivity. Furthermore, cultivation cycles, which involve crop rotation and alternation between planting and harvesting periods, are essential for soil sustainability and productivity.

Historically, we have undergone a significant transformation in the sector, from the use of the hoe to mechanization and the adoption of advanced technologies. Each technological leap was accompanied by a cycle of increased productivity and efficiency, followed by periods of adaptation and stabilization. The introduction of tractors, planters, harvesters and, later, precision agriculture, exemplify how these cycles of innovation and technological renewal shape the agro sector, influencing positive and negative economic movements in the market.

As the sector continues to evolve, those involved in the production chain who can successfully adapt to these cycles will be better positioned to reap the rewards of a dynamic and constantly changing market. In this way, Brazilian agribusiness will continue to be a fundamental pillar of the national economy, with an increasingly central role in global food security.

*Per Rodrigo Junqueira (in the photo), chairperson of the 16th SAE BRASIL Agricultural Machinery Symposium, general manager of AGCO and vice-president Massey Ferguson South America