Oct 25, 2017

68.3% of Ag Income in Brazil from Crops, 31.7% from Livestock

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

The Brazilian Ministry of Agriculture recently released data indicating that the Gross Value of Agricultural and Livestock Production in Brazil (VBP) for 2017 is projected to be the lowest in several years. For Brazil as a whole, 68.3% of the agricultural gross receipts come from crop production while 31.7% of the agricultural gross receipts come from livestock production.

The state of Mato Grosso is the largest row crop producing state as well as having the largest cattle heard in Brazil. In Mato Grosso, 80% of the agricultural gross receipts come from crop production while 20% comes from livestock production. The VBP in Mato Grosso for 2017 is estimated to be down 2.9% compared to 2016 and the lowest in three years.

The reason for the reduction is low commodity prices due to excess worldwide grain production and low cattle prices due to a series of setbacks for the meat sector including a tainted meat scandal earlier in the year and more recent problems enveloping JBS, Brazil's largest meat packer.

Receipts are down for the two main crops produced in Mato Grosso - soybeans and corn. Receipts for soybeans are down -9.97%, corn receipts are down -9.12%, and for dry beans, they are down -17.8%. The only major crops registering higher receipts are cotton +21.7%, sugarcane +42.6%, and rice +3%.

On the livestock side, they look at beef cattle, hog, poultry, and egg production. Beef cattle receipts are down -7.4%, dairy receipts are down -7.6%, poultry receipts are down -11.8%, and egg receipts are down -23.9%. The only livestock sector that managed to improve was hog production which had an increase of +9.9%.