Total production of 271.4 million tonnes is expected for 2022/2023

08/25/2022

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A soy farm in Brazil: production of the oilseed will reach 150 million tonnes in 2022/23 — Foto: Anna Carolina Negri/Valor

The Brazilian production of grains is expected to hit a new record in the 2022/23 crop, according to the first projections of the National Supply Company (Conab) for the season, released on Wednesday.

Driven by the increase in the area and good profitability of soybean, corn, and cotton crops, the harvest may grow 13.5% and reach 308 million tonnes, despite the increase in production costs — if, of course, the weather is favorable.

If the projection is confirmed, it will be the first time that the Brazilian grain harvest will exceed 300 million tonnes. More than 90% of the volume, or 294.3 million tonnes, will come from soy, corn, cotton, rice, and beans.

For the 2021/22 harvest, Conab estimates a total production of 271.4 million tonnes, with some crops still being closed, such as corn, wheat, and cotton.

According to the state-run company, soy production will reach 150.36 million tonnes in 2022/23, 21% more than in 2021/22, and a new record. Even with higher costs, the attractive prices of oilseeds in the international market are expected to stimulate a 3.5% increase in the area, to 42.4 million hectares.

The productivity of the 2022/23 cycle may also recover after the drought that affected the South region and part of Mato Grosso do Sul earlier this year.

With better crop yields and higher production volumes, Conab believes that soybean exports will grow 22.2% and reach 92 million tonnes in 2022/23, another record — Brazil leads the global production and exports of the grain.

With the advance of soybeans, the area planted with corn is also expected to grow in the second crop of the 2022/23 cycle and contribute to a total production estimated at 125.5 million tonnes, an increase of almost 10% over 2021/22.

For the second yearly crop, an 8.2% increase in harvested volume is expected, to 94.53 million tonnes. In the first harvest, the area is expected to fall 0.6%, estimates Conab, and production may reach 28.98 million tonnes.

In the case of cotton, the state company indicates a harvest of 2.92 million tonnes (7% more than in 2021/22), with increases in area and productivity. It is also expected a resumption of exports to a level close to 2 million tonnes.

The scenario is supported by good fiber prices defined in anticipated sales, which guarantee good profitability for the activity. But the uncertainties about the world economy, with the possibility of a recession in some countries and a decrease in demand, keep the segment on alert.

Rice and beans have similar scenarios projected by Conab, with a slight reduction in area and production adjusted to demand — and normality as far as domestic supply is concerned. The crops are impacted by the good profitability of “rivals” soy and corn.

The production of rice in the 2022/23 harvest is likely to be around 11.2 million tonnes, Conab said. The bean harvest tends to follow close to 3 million.

Conab also released its projections for the meat market, which will again face tight margins with the increase in costs driven by still firm corn prices.

Even so, Brazil may slaughter 30.1 million head of cattle in 2023, up 2.7% year-over-year. The increase is due to the movement made by cattle breeders to retain cows in recent years.

With a larger herd, beef production is likely to grow 2.9%, with the beginning of the process of culling cows in the livestock cycle. This way, exports tend to grow 5% next year. The per capita consumption in Brazil may see a slight increase and reach 26 kilos per inhabitant per year.

Poultry slaughter may increase by 3.2% in 2023, to 6.29 billion chickens. Foreign sales may fall 1.7% and stand at 4.5 million tonnes. The combination of these factors will result in a probable increase in domestic supply of 4.2%, raising per capita availability above 51 kilos per inhabitant per year, Conab projected.

The opening of new markets for Brazilian pork, such as Southeast Asian countries and Canada, is likely to mitigate the fall in exports to China, where the pig herd is recovering after a sanitary crisis.

The tendency for 2023, according to Conab, is an increase of 6.7% in slaughtering, but there will be no increase in the production of protein because of the lower average weight of the animals, due to the high costs of feeding the herds.

*By Rafael Walendorff — Brasília

Source: Valor International

https://valorinternational.globo.com/