The minimum prices calculated by the National Supply Company (Conab) for orange in natura, wheat grains, wheat seeds, Arabica coffee and conilon coffee from the 2022/2023 harvest have been updated. The new values, which were published in the Official Gazette this Thursday (31/03), are valid until 2023 and will be used as a reference in operations linked to the Minimum Price Guarantee Policy (PGPM), which aims to guarantee a minimum remuneration to farmers.
To define the minimum price for wheat, classified as basic, domestic, bread and improver, the production costs carried out by Conab were used. According to the surveys, there was a significant increase due primarily to the average increase in the costs of fertilizers (113,1%), pesticides (33,2%) and tractors and harvesters (53,8%), which represent 64,1 % of variable costs and 48,7% of total costs in the places used to calculate minimum prices. As a result, one of the reference values for bread in the South Region, for example, went from R$48,18 per bag in 2021/22 to R$79,17/bag in the 2022/23 cycle. The minimum price of wheat seed in the South, Southeast and Center-West regions and in the state of Bahia rose from R$1,98 to R$3,25 per unit.
In the case of oranges, the average variable cost weighted by the area destined for harvesting in the states was estimated at R$ 24,23/box of 40,8 kg in November 2021, with this value implying an increase of 36,43% in relation to the minimum price approved for the previous year. “Several sectors of the economy suffered a shock due to the pandemic, not only in Brazil, but around the world. In the case of agriculture it was no different, and the productive disruption particularly impacted inputs, such as fertilizers and pesticides”, says the superintendent of Market Studies and Supply Management at Conab, Allan Silveira. “The average share of these two items in the orange producing regions analyzed is around 37,3% of the total cost of November 2021. In the case of fertilizers, there was an average increase of 127,2% in November 2021 compared to the same period in 2020. In the case of pesticides, the average increase was 43,9%. The value of labor increased by 6,2% on average and the share of this item is around 21,4% of the total cost. In other words, as with several other crops, the increase in production costs was very strong for oranges in 2021.”
When proposing a minimum price for coffee, based on the analysis of production costs, it was found that there were also significant increases in inputs, with fertilizer being the main villain behind the increase. “Fertilizers showed an average increase of 149,2% in the nine Arabica coffee production areas in November 2021, compared to the same period in 2020”, explains the manager of Basic Foods and Perennial Crops at Conab, Bruno Nogueira. “This input represents around 43,0% of the variable cost of production for the Arabica type, followed by labor, with a share of 24,2% in the variable cost and an increase of 21,8% in the same period. Another notable item is pesticides, which account for 7,9% of the production variable cost and saw an average increase of 39,4% in Arabica production areas. In relation to the conilon type, processing has an average share of 16,8% and increased by 111,4% in the same period. When defining minimum prices, Arabica coffee went from R$369,40 in 2021/22 to a reference value of R$606,66 in 2022/23. The conilon type also increased, going from R$263,93 to R$434,82 per bag.”
Minimum prices are set by the National Monetary Council (CMN), in accordance with the proposal sent by Conab to the Ministry of Agriculture, Livestock and Supply (Mapa). See here Map Ordinance No. 419 and check out more information about minimum prices differentiated by product and region of the country.
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Research indicates that the best strategy is to monitor both pests early, to detect the presence of these insects in the orchard and monitor the population until control levels are reached, avoiding fruit loss.
