Drought impacts soybean and corn productivity in the 2021/22 harvest

The lack of rain harmed the development of soybeans and corn, mainly in the South region and Mato Grosso do Sul, in the 2021/2022 harvest, according to the results of production cost surveys from the Campo Futuro Project.

Data from the production chain of cereals, fibers and oilseeds (soy, corn, wheat, rice and beans) were presented on Tuesday (1st), during a live broadcast promoted by the Brazilian Confederation of Agriculture and Livestock (CNA).

During the debate, CNA's technical advisor, Tiago Pereira, stated that the regions analyzed were influenced by climatic conditions, mainly drought in the 2021/2022 cycle. “The escalation of input prices and geopolitical conflicts also interfered in the conduct of activities.”

The researcher at the Center for Advanced Studies in Applied Economics (Cepea), Mauro Osaki, presented the main results of Campo Futuro this year. According to him, the Effective Operating Cost (COE) of the regions analyzed for the five crops increased in the 2021/2022 harvest, compared to the previous cycle. Fertilizer was the main item that weighed on the COE.

Soybean

In relation to soybeans, Mauro reported that the drought harmed the development of the grain in Rio Grande do Sul, Paraná, Santa Catarina and Mato Grosso do Sul. “The drought caused major losses in Tupanciretã (RS), for example, which recorded productivity of 13 bags per hectare and a negative gross margin of R$2,4 per hectare,” he said.

Corn

According to the data presented, the drought also harmed the results of summer corn in the South region. Leafhopper attacks were also a factor that impacted production. In the first season, insecticide costs increased by 21%. According to the researcher, the average price of corn increased by 13% in the 2021/2022 summer harvest, but the average gross revenue fell by 7% in the same period. This retraction is due to a 20% drop in productivity. The COE was 31,1% higher compared to the 2020/2021 season.

Wheat

The results of the surveys reveal that the average price of wheat rose in the 2021 harvest compared to the previous one, but this increase was not compatible with the increase in production costs, such as the COE, which increased 34%. Among the eight regions surveyed, four recorded gross revenue higher than the Total Operating Cost (COT), with emphasis on Campos Novos (SC).

Rice and beans

The lack of rain reduced the availability of water in reservoirs, negatively affecting rice productivity. Bean production in the 1st harvest also suffered from the lack of rain. Among the three typical properties evaluated for rice production in Uruguaiana (RS), Camaquã (RS) and Tubarão (SC)). The two typical RS farms had the lowest profit margins, due to the greater expenditure on fertilizers.

The general director of AgResource Brasil, Rafael Mandarino, also participated in the live and spoke about unknown situations for global agricultural markets, such as the great economic reset that is underway as European/American/global inflationary pressures increase, in addition to the war between Russia and Ukraine and the South American drought, which produce the biggest global grain supply shock since 1914.

For Rafael, China and the USA are at a political crossroads and the global and US recession comes as another factor of attention amid the banks' struggle to control inflation.

Mandarino also presented an overview of food inflation in the United States; global consumption of corn, wheat and soybeans; corn exports from Ukraine; Russian exports and monthly global wheat trade; Brazilian foreign sales of corn and annual variation in world demand for corn.