Brazil reduces forecasts for next harvest

Brazil’s 2024 harvest of grains, cereals, and oilseeds is expected to top the mark of 306 million tons, according to fresh data by the Brazilian Institute of Geography and Statistics (IBGE) and the National Supply Company (Conab). 

Per the IBGE, this volume would be 2.8 percent (or 8.9 million tons) lower than the record-setting 2023 harvest — over 315 million tons. Last year’s supercharged performance helped Brazil’s GDP growth numbers be much better than anticipated. 

Conab sees an even bigger year-on-year drop — 4.2 percent (or 13.5 million tons). 

According to Carlos Barradas, an IBGE research coordinator, while soybean production tends to register a new record crop of over 154 million tons this year, the country’s second-most important crop, corn, is expected to decline by over 10 percent to 116.9 million tons. 

Excessive rainfall in the South and dry weather in the North have delayed the planting of the new crop in some states, which is likely to delay the harvest and, consequently, the planting of the second crop, making the latter more vulnerable to climatic risks. 

Extreme weather conditions influenced by El Niño are the main — but not the only — reason for the more pessimistic outlook. Conab also warns of lower margins for producers, possibly further drops in commodity prices, and low Chinese demand.

Historically, Conab’s estimates have always been slightly more optimistic than IBGE’s, but the two entities are unifying statistical bases. Despite seeing a sharper drop in production for the next harvest now than it did in November, Conab noted an increase in the planted area — 0.3 percent of the cultivated area, up to 78.7 million hectares — setting the stage for Brazil to surprise again if the weather somehow helps. 

Even if somewhat worse than the first projections, these numbers would still consolidate Brazil as the world’s largest grain producer.

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