Production costs in Rio Grande do Sul are expected to increase by almost 5% in 2026.

Farmers in Rio Grande do Sul (RS) face a double challenge in 2026. While production costs continue to rise, the prices received for their produce have not yet recovered to the levels of a year ago. The data comes from the monthly report on Agribusiness Inflation indices in Rio Grande do Sul, released by the Economic Advisory of the Federation of Agriculture of the State of Rio Grande do Sul (Farsul) this Tuesday (June 2).

The Production Cost Inflation Index (IICP) registered an increase of 1,55% in April, accumulating 4,90% for the year and 2,37% over the last 12 months. The main driver of the month was fertilizer, which became 8% more expensive in April, pressured by uncertainties in the international input market and the increased value of raw materials used in its manufacture.

The movement of agricultural pesticides went in the opposite direction. The 4% increase in the dollar during the period contributed to reducing their prices, partially easing the pressure on the total cost. Even so, the overall result was in positive territory, that is, more expensive for the producer. "The rise in costs continues, although at a lower intensity than that observed in March," the report states. In the accumulated 12 months, the IICP accelerated to 2,37%, reinforcing the upward trend that replaced the period of deflation recorded throughout 2025.

Prices received are rising, but are still in the negative.

On the revenue side, the scenario is one of partial recovery. The Price Inflation Index Received (IIPR) rose 0,81% in April, driven by the appreciation of milk, rice, wheat, and beef cattle. However, the accumulated figure over 12 months remains significantly negative -9,19%, which means that, despite the recent improvement, the producer still receives less today than they did a year ago for the same product.

Rice and milk continue to be pressured by lower supply, while wheat shows the typical price increase of the off-season period. Beef cattle, in turn, reflect the shift in the livestock cycle, which historically begins to favor producer prices after periods of intense slaughter.

One of the highlights of the report is the contrast between what the producer receives and what the consumer pays on the shelves. While the IIPR (Index of Production Price) accumulates -9,19% over 12 months, the IPCA (Broad Consumer Price Index) for Food and Beverages, which measures food inflation for the final consumer, accumulates an increase of 2,69% in the same period. The overall IPCA is at 4,39%.

The numbers reveal a significant disconnect between the field and the table, demonstrating that food inflation does not originate with the rural producer, but in subsequent stages of the production chain – transportation, processing, distribution, and retail – in addition to broader macroeconomic dynamics such as exchange rates and interest rates. The phenomenon is not new, but the data from April 2026 make it more visible: those who produce receive less than a year ago; those who consume pay more.