Lower soybean production reduces agricultural GDP; RS will be a new hurdle

This crop, as the harvest season approaches, faces major climate problems. In some places, excessive drought has greatly affected grain productivity, and in other places, heavy rainfall has delayed planting.
André Diez, Professor of Economics at Ibmec SP

Another factor explaining the negative result is the decline in prices of agricultural products. The movement believes that calculating GDP measures the final value of production. Thus, the effect of agricultural growth on aggregate final goods and services leads to a lower rate of variation for the sector.

The sector advanced by 6.4% in the last four quarters. Despite the increase, the result corresponds to the lowest annual growth since the last quarter of 2022 (-1.1%). In the fourth quarter of last year, the variance in this same comparison was 15.1%.

Agriculture grew again in the quarterly analysis. Compared to the last four months of last year, the sector broke the negative sequence of the last three quarters of 2023 and advanced 11.3%, the largest increase since the 16.2% jump in the first three months of last year. This increase is explained by cyclical factors, such as the concentration of larger harvest quantities at the beginning of the year.

Expectations indicate that the harvest will be lower than last year. The LSPA also expects Brazil to harvest 299.6 million tons of cereals, legumes and oilseeds. If confirmed, the volume would correspond to 5% lower production than last year.

The year is not good for agriculture. We expect a decline in soybean production, our main crop.
Rebecca Bales, National Accounts Coordinator at IBGE