Exchange ratio in soybeans and corn should favor producers from Rio Grande do Sul

The Federation of Agricultural Cooperatives of the State of Rio Grande do Sul (FecoAgro/RS) released a survey of soybean and corn production costs for the 2020/2021 harvest. In the entity's assessment, considering the price exchange ratio and production costs, this will be the best macroeconomic scenario for planting crops in recent harvests.

According to the data, the total cost of corn production is R$5.034,58 per hectare, 9,83% higher than the 2019/2020 harvest. Calculations indicate a profitability of 36,65% for corn at the current time, well above the 8,63% of the previous harvest considering a productivity of 160 bags per hectare. This means that the producer will use 117 bags this year compared to 147,2 bags in the previous harvest to pay costs, a drop of 20,51%. If only the disbursement is considered, it will be necessary to harvest 83,08 bags this harvest compared to 108,73 needed in the last period, a reduction of 23,61%.

In the case of soybeans, the survey showed an increase in the cost of 7,72%, reaching R$3.643,02 per hectare. It means a 29,02% reduction in production necessary to pay for all farming costs at a price of R$103,00 per bag. Therefore, the producer will need to harvest 35,37 bags to cover the total cost and 23,14 to pay the disbursement.

According to an assessment by the entity's president, Paulo Pires, the numbers indicate a favorable scenario for the next harvest given the level of current agricultural prices with a normal harvest. "Despite the rise in costs, due to the exchange rate devaluation, the prices of agricultural products rose further, pointing to a positive moment for the planting of corn and soybeans. It is a very good perspective, remembering if we have prices and productivity in these conditions at harvest , we will have a high probability of the producer having a good profitability", he highlights.

According to FecoAgro/RS, exchange rate variation can impact production costs, especially given the fact that the producer depends on importing raw materials such as fertilizers. On the other hand, the dollar at high levels in relation to its history reflects positive agricultural prices.