After a 2022 severely affected by weather, Brazilian agro should grow again in 2023

Last year left much to be desired for Brazilian grain producers. Early forecasts of stellar results were quickly dashed by unfavorable weather in the country’s South region and the war in Ukraine, which led to logistics issues and higher production costs. For 2023, the outlook is a bit different: experts are more optimistic, yet still cautious of uncertainties at home and abroad.

Most sector analysts agree that agriculture’s final contribution to Brazil’s 2022 GDP will see a sharp drop after a series of records in previous years. Perhaps the most optimistic projection comes from Banco Santander, betting on a mere 0.3 percent drop. In the view of think tank FGV Ibre, the falloff will be much larger, around 2 percent — while the National Confederation of Agriculture (CNA) expects a 4.1 percent slip.

On the other hand, for this year, expectations diverge between hopeful increases and more timid improvement. Santander and FGV Ibre expect GDP contribution to grow by 7.5 and 8 percent, respectively, while the CNA forecasts 2.5 percent growth.

Part of the growth will certainly be down to the comparison with a weak 2022. However, expectations of record production in agricultural commodities for this year should also play a big part in 2023’s numbers. 

The most recent forecast by Brazilian statistics agency IBGE on the subject indicates that the 2023 grain harvest is set to hit 296.2 million tons — 12.6 percent more than the previous year and the biggest harvest since records began in 1975.

According to survey manager Carlos Barradas, this projected improvement is down to weather conditions that are favorable to crop development, which are set to allow for a recovery in production. With crops on track, 2023 should see a soybean super...