According to the International Center for Economic Analysis and Agricultural Market Studies (CEEMA), the agricultural market corn in Brazil faces significant challenges in both production and marketing. This year's second crop was smaller than expected, which resulted in a slight increase in cereal prices on the domestic market. However, this increase is still not enough to cover total production costs, creating a worrying situation for farmers.
Currently, corn prices range from R$ 42.00 to R$ 60.00 per bag, depending on the region. In Mato Grosso, the price in Campo Novo do Parecis increased from R$ 36.00 to R$ 42.00 per bag. In Rio Grande do Sul, the average price reached R$ 59.33, with some regions recording values as high as R$ 57.00.
Despite this increase in prices, CEEMA warns that, according to the Mato Grosso Institute of Agricultural Economics (Imea), the weighted price for the 2024/25 harvest in Mato Grosso, of R$ 37.91 per bag, is only enough to cover crop operating costs. CEEMA estimates the total cost, including fixed expenses and the producer's profit margin, at R$ 54.38 per bag. This results in a deficit of R$ 16.47 per bag, raising concerns among farmers about the sustainability of production.
Corn export challenges raise concerns
In addition to the challenges in the domestic market, Brazil is also facing difficulties in the export scenario. According to data from the Secretariat of Foreign Trade (Secex), in the first 10 business days of September, the country exported 3.08 million tons of corn, which represents a daily average 29.7% lower compared to the same period last year. CEEMA highlights that exports in the months of July and August were already below expectations, and September follows the same trend. The National Supply Company (Conab) forecasts exports of only 30 million tons, while the market expected a volume of at least 40 million.
With the second crop harvest completed, totaling 90.2 million tons, Brazilian corn production in the 2023/24 harvest reached 115.7 million tons, which represents a drop of 12.3% compared to the previous cycle. This reduction is equivalent to a loss of 16.2 million tons when compared to the previous harvest.
Faced with low productivity and difficulties in exports, many Brazilian producers are reconsidering the size of the areas to be sown with corn in the next harvest, while the economic scenario becomes increasingly challenging.
Source: Aline Merladete | agrolink
