Mato Grosso, Brazil’s largest grain-producing state, could lose as much as BRL 53.9 billion (USD 10.6 billion) in gross production value this year — a drop of 26.62 percent from 2023 — due to the decline in soybean and corn production and prices, according to a report released by agricultural economics institute Imea.
As we have reported, after record harvests last year that boosted the country’s GDP beyond market expectations, this year’s production will be smaller. According to Agroconsult’s latest report on soybean production, this is because the productivity in major production hubs will fall sharply as a byproduct of extreme weather.
In the case of Mato Grosso, Imead predicts a 31.11 percent decline in soybean production to BRL 67.16 billion in gross production value — the first drop since 2013. The expected decline for corn is even greater, at 39.31 percent, with the value of gross production rising from BRL 40.64 billion last year to BRL 24.67 billion this year.
The state’s cotton, livestock, and pork production is also expected to fall, with the only exception being poultry.
Since March last year, Brazil has been posting record trade balance surpluses due to higher production volumes that largely offset the global drop in commodity prices following the pandemic boom.
Many analysts believe that the change in Brazilian foreign trade is structural; that is, the surplus behavior will continue, but this does not mean that the country will not feel the effects of fluctuations in global prices.
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