Expert outlines the future of agribusiness in 2021

The first quarter presents good prospects for Brazilian agribusiness in 2021, according to professor at Fundação Escola de Comércio Álvares Penteado (FECAP) and specialist in the field José Luiz Tejon Megido.

The pandemic led to the search for food security in many nations. Afraid of shortages, there was an increase in safety stocks. Likewise, with the announcement of vaccination around the world, in 2021 we will witness a ‘reset’ of the planetary economy.

"Those who have raw materials to sell will find this year a great field to overcome economic and financial results. And Brazil has commodities to sell. While the United States Department of Agriculture has just released its newest report on supply and demand for agricultural products , reducing the global soybean production estimate from 362,05 million to 361 million tons, in addition to reducing final stocks from 85,64 million to 84,31 million tons, here in Brazil we will have a record harvest", he explains.

NUMBERS FROM 2020

According to data from the Ministry of Agriculture's Secretariat of International Relations, agribusiness exports in 2020 had excellent performance, the second highest in the entire historical series, behind only 2018.

"In value, it was US$ 100,81 billion in 2020, against US$ 101,7 billion in 2018. Compared to last year, the increase was 4,1%. And we obtained an increase due to the greater volume exported. The soybean complex with grain, bran and oil was the largest exported product, with US$ 35,24 billion and 101,04 million tons".

Grain exports represented 81,1% of the exported value. In animal protein, in the same way, we grew and the outlook remains positive for 2021.

"A movement observed by integrations of poultry, pork, eggs, has been the search for contracts directly with soybean and corn farmers to secure the most important product in their supply channel, feed."

In parallel, we are in a world that must resume growth, with prospects for China to grow 8% this year, the European Union 5% and the United States, the world's largest economy, 3%.

PROJECTION FOR 2021

The latest survey of the grain harvest carried out by the National Supply Company shows that Brazil should harvest 264,8 million tons, an increase of 7,9 million compared to the 2019/2020 harvest, when the harvest was 256,94 million of tons.

The biggest piece of this cake is soy, accounting for around 50% of the grains. The soybean area grew 3,4% and the harvest estimate is 133,7 million tons.

Other grains also stand out: rice (10.904 million tons), beans (3.144 million tons), corn (102.313 million tons), soybeans (133.692 million tons) and wheat (6.234 million tons).

For 2020/21, according to Conab, we will have a record of 264,8 million tons. With cotton lint, 2.651 million tons. In this raw material, 20 years ago, Brazil was the second largest importer of cotton in the world. Today, we are the second largest global exporter.

In animal protein, the Ministry of Agriculture sees growth in chicken, milk, cattle and livestock in general, rising from R$290,8 billion in 2020, to R$308,5 billion.

"The good news at the beginning of this first quarter is that the harvest has already started in the largest producing state, Mato Grosso. Production could reach 35,43 million tons, with a slight drop due to productivity due to adverse weather conditions. However, , with an increase in area. Thus, the situation became positive. Compared to Conab's previous estimate, soybeans had a reduction of around one million tons. And the main factor for this was water insufficiency, mainly in Rio Grande do South".

Brazilian agricultural income is expected to rise 10% in 2021, with the gross value of production potentially reaching almost R$1 trillion.

"The more specific number is R$959,7 billion. Crops will mean R$651,2 billion, increasing by 12,2% compared to 2020. Soybeans are expected to bring an income in the 2021 VBP of R$303 billion, 24,4 .2020% positive over 17,7. Corn is expected to grow by 117,1% in its gross production value, reaching R$ 2020 billion. And other crops will grow, as predicted by the Ministry of Agriculture: rice, potatoes, cocoa, cassava and wheat. Thus, in general, the conclusion is that we started the first quarter with excellent results in XNUMX, and heading towards a new super harvest in Brazil, with commodity prices on the rise, in addition to a favorable exchange rate for exports".

According to the expert, this is a positive year, with opportunities for crops and animal protein sectors such as fish, in addition to others.

"Time to invest in the value of your agricultural property, time to take care of management, professionalization and succession. There are many opportunities for distribution, startups and innovation. Inflation is a big problem to be managed by governments, but for a strong country in agribusiness like Brazil, everything indicates that we will have great results this year and in the new 2021/2022 harvest."

FUTURE OF BRAZILIAN AGRO

Opportunities also exist for the entire horticultural sector. The country can and should access new markets, diversifying with fruits and vegetables. In addition to bioeconomy opportunities, green bonds and the use of the law on remuneration for environmental services.

The sector must pay special attention to perennial crops such as sugarcane, coffee and sugar. "The dollar's future value is uncertain, and our biggest client, China, could re-establish new relations with the United States under the Biden administration, which is also expected to intensify non-tariff barriers associated with sustainability issues alongside Europe."

Producers must invest in technology, seeking productivity combined with profitability.

"Digitalization, and the increasing entry into low-carbon agriculture, where we are the best in the world, ensures access to markets from now on that will be increasingly governed by a concept of health."

With strategic planning of its production chains, Brazil is able to double its agricultural size by 2030, from the a of 'avocado' to the z of 'zebu'.

"Brazil needs it, the economy needs it, the country's GDP needs it and the entire Brazilian population needs it. It will mean entrepreneurship and cooperativism before, inside and after the farms."

Agribusiness represents around 25% of the total Brazilian GDP and has the potential to reach revenues of US$1 trillion in the next ten years.

POWDER IN AGRIBUSINESS & COMMERCE

And it is seeking to contribute to training cutting-edge professionals who can work in this market that FECAP is launching the EAD postgraduate course in Agribusiness & Commerce.

The course is aimed at entrepreneurs, professionals who already work or not in some segment of agribusiness, students trained in various academic areas, aiming to channel their business focus and careers within the agribusiness universe, with an emphasis on food trade policies and practices, fibers, feed, agroenergy, and biocommerce. Another difference is also the emphasis on the fundamentals of commerce involving agribusiness.

The course curriculum is prepared with the skills necessary to be a manager in organizations in the agribusiness complex, before, within or after farm gates; in the same way in cooperativism, associations, NGOs, media, in public and/or private functions, in civil society organizations, with added value of commerce practices for application in their own entrepreneurial initiatives and/or development of their careers.

FECAP's postgraduate courses allow professional improvement and personal development, enabling the student to act with integrity and competence in a specific area in the job market.

The curricular matrices of FECAP's postgraduate courses are structured to awaken an entrepreneurial streak in each of its students, based on relevant, practical and contemporary content.

FECAP's infrastructure meets all students' needs during the course, with a high-tech computer laboratory, equipped classrooms and a library with a collection of more than 60 thousand copies.

Furthermore, our teaching staff is made up of qualified professors, most of whom have PhDs, but who also have extensive market experience.

Service
The course is online, with classes on Fridays (19pm to 22:40pm) and Saturdays (9am to 12:40pm), via Zoom.
Learn more and sign up: https://www.fecap.br/pos-graduacao/agribusiness-e-commerce/