Gross Value of Minas Gerais agro production should close the year at R$ 123,9 billion

Estimates of the Gross Production Value (VBP) of agriculture in Minas Gerais for 2023 indicate total revenue of R$123,9 billion, representing a reduction of 0,7% compared to the previous year. The projection was calculated this July, based on data accumulated from January to June, by the Ministry of Agriculture and Livestock (Mapa), using information from IBGE, the National Supply Company (Conab) and the Center for Advanced Studies in Economics Applied (Cepea/USP).

According to the Undersecretary of Agricultural Policy and Economy of the State Secretariat for Agriculture, Livestock and Supply (Seapa), Caio César Coimbra, the slight retraction is due to the devaluation of coffee, the flagship of Minas Gerais agribusiness, in the first months of 2023. “Still, the expectation for the whole year is for growth in the coffee VBP. The increase is mainly justified by the improvement in climate conditions for crops compared to recent years”, he assesses.

Among the agricultural segments, crops are responsible for 67% of the value billed by agribusiness in Minas Gerais. For the year 2023, a drop of 0,9% in this segment is estimated, with revenue of R$82,4 billion. Despite the downturn, some crops show growth in their revenues, including: coffee (5,6%), sugar cane (6,2%), beans (29%), banana (2%), tomato (24,3%), orange (28,5%), cassava (35%), peanut (81,7%), grape (10,1%) and rice (18,3%). Together, the products correspond to 63% of total revenue from crops in Minas.

Coffee

Coffee occupies the lead in the agricultural segment, with VBP estimated at R$29,1 billion and an increase of 5,6% compared to the previous year. Despite the reduction in market prices for the product, compared to 2022, the good result of the VBP is explained by the forecast growth of the harvest in 2023, which should reach 27,8 million bags, an increase of 26,7%.

The devaluations of the product, despite generating concern among producers, resulted in an acceleration in the pace of business at some points in June.

Sugar cane

The VBP estimate for sugar cane is R$ 12,3 billion, a figure 6,2% higher than the last harvest. According to Conab, for the 2023/24 harvest, production is expected to grow 10,7% and reach around 78,1 million tons harvested, due to the good rainfall regime in the producing regions, which provided good soil moisture and contributed to the full development and improvement in the productive quality of sugarcane fields.

“Sugarcane cultivation is of great importance for Minas Gerais, which is today the second largest Brazilian producer. In addition to generating employment and income for the state, sugarcane is a raw material for the production of ethanol, a strategic fuel for the decarbonization of the atmosphere”, highlights Undersecretary Caio.

Grains

Also according to Conab, there is an expectation of a record grain harvest in Minas Gerais, in the order of 18,7 million tons. Soy, which occupies second place in the agricultural segment in Minas Gerais, with a share of 22,3% of the total, behind only coffee, has an estimated revenue of R$ 18,3 billion. The figure is 12,4% lower than in 2022.

Negotiations involving soybeans remained heated during the month of June, due to the arrival of the second corn harvest. Cooperatives and cereal producers encouraged producers to liquidate the remaining part of the summer harvest, with the aim of freeing up space in warehouses. This scenario resulted in an increase in oilseed liquidity in the Brazilian market, albeit at lower prices. The devaluation of the dollar against the real reinforced the pressure on values ​​in Brazil.

Other products projected to fall include corn (17,3%), potatoes (5,8%), cotton (10,8%) and wheat (18,3%). Domestic corn prices began and ended June weak. The devaluation movement at the end of June occurred as a result of the advance of the second harvest, which, although delayed compared to the previous season, gained pace and intensity in the second half of July. Thus, demand for cereal weakened, with buyers negotiating only on a one-off basis, based on immediate need.