CNA presents coffee production costs

The Brazilian Agriculture and Livestock Confederation (CNA) promoted, on Thursday (03/11), another live broadcast of the Campo Futuro Project Results Circuit to present the production costs of coffee farming.

In 2022, information was collected on the production of arabica and conilon coffee in 15 regions of six states (Bahia, Espírito Santo, Minas Gerais, Paraná, Rondônia and São Paulo). According to the data, the main items that weighed on the Brazilian coffee farmer's pocket were fertilizers and labor.

For CNA's technical advisor, Raquel Miranda, in addition to being strategic for analyzing the sector's performance, data from the Campo Futuro project is important to assist rural producers in making business decisions.

During the live, the general coordinator of the Center for Intelligence in Management and Markets at the Federal University of Lavras (CIM/UFLA), Luiz Gonzaga de Castro, presented the main results of the surveys, with emphasis on the variation in the Effective Operating Cost (COE ) of activity in recent years.

According to him, in the manual and dryland production system of the Arabica species, a considerable increase in the COE was observed for all modal properties, reaching an increase of 151% in Caconde (SP), compared to 2021. “This occurred in reason for the reduction in productivity and the rise in fertilizer prices and labor costs”.

The scenario was repeated in the semi-mechanized and dryland system in Capelinha (MG) and Londrina (PR), where the COE increased by 53% and 78%, respectively. In mechanized driving in Monte Carmelo (MG) and Franca (SP) there was also a variation in the indicator, in the order of 117% and 78%, respectively.

“In general, all regions evaluated by the project had an increase in Effective Operating Cost in the last year, mainly due to fertilizers and labor. The average was 35% for fertilizers and 28% for labor,” he said.

In the manual and semi-mechanized systems of conilon coffee in Cachoeiro de Itapemirim, Jaguaré and Rio Bananal, in Espírito Santo, Cacoal (RO) and Itabela (BA), fertilizers represented 33% of the Effective Operating Cost, and labor, 30% .

For Luiz Gonzaga, the biggest impacts on indicators come from fluctuations in gross revenue. “Price risk management alternatives need to be worked on, as well as cost management and planning.”

Safras e Mercado consultant, Gil Carlos Barabach, participated in the live and spoke about the scenario and trends in the coffee market. “The International Monetary Fund (IMF) revised downwards the global growth of the main coffee consuming countries, that is, the scenario for 2023 is still one of economic recession, which could impact the demand for coffee. The United States economy, for example, which is the largest single consumer of coffee in the world, will grow just 1% in 2023.”

Despite the global forecast being negative, the projection for Brazil in the 2023/2024 harvest is an increase in coffee production and exports. “The outlook is for normal weather in late spring and early summer.” Gil Calos also gave some marketing tips for producers in an available market. “It is important to measure sales, manage opportunities and take high interest rates into account when making decisions.”

In the case of future positions, the consultant mainly recommends linking future sales to “put and call” options to protect margins.