Report updates agricultural production costs in Santa Catarina

This week, data from the new survey of reference production costs carried out by the Center for Socioeconomics and Agricultural Planning (Epagri/Cepa) were released. The update covers the main products grown in Santa Catarina during the winter harvest: garlic, onion, oats and wheat. The data reveals a downward trend in the costs of fertilizers and pesticides compared to the previous year, considering nominal values, without correction for inflation.

The reference production costs are based on the survey of prices of inputs, services and other components necessary for agricultural production, conducted by Epagri/Cepa. Three times a year, in April, July and October, a team of market agents collects prices for more than 700 items in all regions of Santa Catarina. The most recent data, collected in April, was used to calculate production costs for winter crops.

Wheat and oats

The reference production cost for wheat, the main winter cereal in Santa Catarina, showed a reduction in relation to the previous harvest. This drop was driven by the decrease in input prices (-11%), especially fertilizers (-26%), pesticides and seeds. In the case of oats, despite the reduction in the prices of fertilizers and pesticides, the increase in the price of seeds resulted in a higher total cost.

João Alves, Socioeconomics and Rural Development analyst at Epagri/Cepa, highlighted that, although the cost of wheat production has decreased, the value received by the producer per bag has fallen significantly compared to last year. This affected the exchange ratio, disadvantaging producers, who need more bags of the product to purchase a bag of fertilizer, for example.

Garlic and onion

For vegetables, such as garlic and onions, reference production costs increased. In the case of garlic, there was an increase in the prices of the main components of the production cost, including inputs, labor, mechanical services and production insurance, comparing April 2024 with April 2023.

As for onions, despite the reduction in input prices, there was an increase in the costs of labor, mechanical services and production insurance. This resulted in a higher benchmark production cost in April 2024 compared to the same period in the previous year. It is noteworthy that labor became the main component of the onion production cost, surpassing inputs, which until then were the producers' biggest expense.

Importance of reference cost

João Alves explains that the reference cost is different from the actual cost recorded by each producer throughout the harvest. The reference cost is calculated based on technical coefficients that consider the state average productivity for each crop. This estimated cost serves as a guide, helping producers to assess whether their actual costs are below or above the reference production cost.