The GDP of the agricultural sector grew 14.46%; that of livestock fell 2.18% according to the Cepea ruler
The Brazilian agribusiness GDP continues to grow at a strong pace. With a new advance in the second quarter of 2021, the GDP of national agribusiness accumulates a high of 9.81% in the first half of this year, according to calculations carried out by Cepea (Center for Advanced Studies in Applied Economics), from Esalq/USP, in partnership with the CNA (Confederation of Agriculture and Livestock of Brazil).
Considering the performance of agribusiness and the Brazilian economy so far, the sector’s share of total GDP should remain around 30% in the year. According to researchers from Cepea, the impulse comes from the results observed for the agricultural sector, considering that cattle raising fell in the balance of the first half of 2021.
Agricultural sector GDP grew 14.46% in the first six months of 2021, with important increases for all segments. Cepea researchers indicate that the primary segment (agriculture) continued to stand out, with the excellent GDP result driven by the high real level of agricultural prices. However, the increase in input costs and the fall in production in different crops, due to the unfavorable climate, limited GDP growth.
According to Cepea researchers, the recovery of agro-industrial production and the strong result of agro-services drew attention. In agribusiness, the recovery in the level of production was intensified from April onwards, and the sectors that stood out were wood products and furniture, paper and cellulose, the textile and clothing sector, the production of canned goods and the of drinks.
High real prices in this segment continued to favor the result. In the case of agro-services, the strong advance of GDP was linked to upstream performances – the good performance of the field and, more recently, the recovery of the aforementioned agro-industrial production -, which contributed to the expansion of the use of various services, from trade and transport even financial, communication, legal, accounting etc.
The GDP of the livestock sector dropped 2.18% in the semester, influenced mainly by the expressive increase in input costs, whether within the gate, in agribusiness or in the sector’s agro-services. In the primary segment (livestock), GDP grew modestly, taking into account the sharp rises in the prices of live animals and milk. This is because the rise in costs was more intense than the rise in product values. In addition, researchers from Cepea point out that the lower production of cattle in the field – an activity with the highest representation in the GDP of the segment – weighed on the GDP, which counteracted the increases in the production of chicken and swine.
In the livestock agribusiness, the scenario was similar, but with even greater intensity, so that the GDP fell in the semester. In general, increases in raw materials could not be passed on in the same measure to negotiated prices, given the weakening of domestic demand, causing a narrowing of margins. In addition, the slaughter of cattle reduced due to the shortage of cattle in the field. In agro-services, the decline in GDP in the livestock sector also reflected the upstream behavior.