After two years of sharp increases, vegetable production costs will cool down in 2023

After facing two years of sharp increases in production costs, vegetable producers should finally go through a slightly “calmer” period in 2023. Survey carried out by the team at Hortifruti Brasil, published by Cepea (Center for Advanced Studies in Economics Aplicada), from Esalq/USP, shows that, in the case of table tomatoes produced in the region of Mogi Guaçu (SP), total costs may increase by just 1% from 2022 to 2023.

However, the rise in production costs in recent years has been very sharp, and this scenario is still limiting the margin and investments in area in the national fresh sector. The prices of fertilizers and other inputs reached very high levels at the beginning of the second half of 2022. Therefore, when evaluating the 2020/21 harvests for 2022/23, the increase in costs is quite high – during this period, the increase for the producer of tomatoes (small scale) in the Caçador region (SC) reaches 93%.

Production cost for 2023

For the 2023/24 harvest, current data signals a possible drop in costs, but expenses should still be well above those recorded in the 2020/21 season. This context will depend on the input purchasing calendar and also on the intensity of the readjustment of labor (salaries) in 2023.

In the global context, although Russia and Ukraine are still in conflict, the region has returned to selling its inputs, and other global suppliers have stood out in the global market. With the adjustment of the production chain in 2023, combined with very low global growth this year, commodity prices fell, and Brazilian farmers also slowed down their desire to increase production, which, consequently, has been limiting demand for inputs. agricultural.

And the input that registers one of the biggest devaluations is precisely fertilizer, which has been strongly boosted in recent years. For the coming months, and even in 2024, this trend of adjustment in input prices should be sustained, since, for now, there are no external or domestic fundamentals that indicate stronger demand for food and/or agricultural inputs.