According to Imea, the production costs for the 2024/25 corn harvest in Mato Grosso, Brazil, saw a slight increase of 0.17% in April, reaching R$ 3,289.94 per hectare. Despite lower fertilizer prices, overall costs are up compared to the previous season.
Corn Production Costs Edge Up
The Mato-Grossense Institute of Agricultural Economics (Imea) reported that the cost of producing corn in Mato Grosso for the 2024/25 season increased slightly in April. Based on a weekly bulletin and a survey by the Cost Monitoring Project (Acapa-MT), the cost per hectare reached R$ 3,289.94. This figure represents a 0.17% rise compared to the same period in the 2023/24 season.
Fertilizer Prices Drop Significantly
While overall production costs have increased, Imea highlighted a significant decrease in fertilizer prices, the most expensive input. Fertilizer costs dropped by 23.61% in April 2024 compared to the 2023/24 season. Despite this decrease, fertilizers still account for 37.7% of the total production costs, although their share has reduced by 10.49 percentage points.
Exchange Rate and Corn Prices
The exchange rate between corn prices and urea closed at 67.96 bags per ton in April, down by 16.39 bags per ton from the previous cycle. Imea noted that, although corn prices remain below levels seen in previous years, the current exchange rate is more favorable than the five-year average. The institute emphasized the importance of monitoring urea prices in the coming weeks, as local prices are significantly influenced by the international market.
Record Soybean Processing in Mato Grosso
In its weekly bulletin, Imea also reported a record soybean processing volume in Mato Grosso. The state processed 1.13 million tons of soybeans in April 2023, a 13.58% increase compared to the previous year. This surge in processing was driven by rising external demand for soybean derivatives, particularly meal.
Impact on Gross Profit Margins
Despite the record processing volumes, the gross profit margins for the sector dropped. Compared to March 2024, the margins fell by 7.45%, and by 48.67% compared to April 2023. The decline in margins reflects lower prices paid for oilseed derivatives. However, Imea expects an improvement in gross profit margins as the prices of these by-products increase. The institute anticipates continued strong processing volumes next month due to sustained demand for soybean meal.
Commentary
The slight increase in corn production costs in Mato Grosso, despite lower fertilizer prices, underscores the complex dynamics of agricultural economics. Producers must navigate fluctuating input costs and variable market conditions. The record soybean processing volumes and the associated drop in profit margins highlight the challenges faced by the agricultural sector in balancing supply and demand. As global markets continue to influence local prices, stakeholders must stay vigilant and adaptable to maintain profitability and sustainability in their operations.