In 2004, the agribusiness grew 5.3%, the best result of the time series initiated in 1992. As has been usual in the last years (except in 2003), the sectors related to livestock (5.0%), with increasing foreign business, presented a performance above the ones associated to crops (4.6%), of higher participation in the agribusiness. The increase of 22.4% observed in the group of pesticides for agricultural use contributed to the growth of the agribusiness above these two main groups (total of agriculture and total of livestock).

The dynamism of the agribusiness, in 2004, showed the positive influence of several factors such as: the major crop harvest for some of the main products, which increased the availability of raw material for the processing in the agribusiness activity; the conquest of new foreign consumer markets (poultry and cattle meat); the sanitary crisis, such as the avian influenza in Asian countries and the mad cow disease in some countries of the European Union; the growth in the exports of agricultural capital goods (tractors) and finally the favorable international prices which were a decisive factor to lever the production of the agribusiness sector in 2004.

Due to the performance in the foreign sales of some of the main agriculture products, according to the information of the Bureau of Foreign Trade (SECEX/MDIC), we can observe the influence of exports upon the growing indexes of the agribusiness in 2004. From January to December, comparing to the same period of 2003, the exports (quantity) of some segments of the agribusiness presented the following results: poultry pluck and giblets (29.0%); cellulose (9.8%); sugar from sugar cane (12.7%); cattle meat (59.3%); tobacco (24.5%); pigmeat (7.3%); plywood (27.8%); and alcohol (220.2%).

The industrial production in quarterly based indexes confirms that the agribusiness sector sustained positive rates during 2004. After growing 5.5% in the first quarter of the year, compared to the same period of the previous year, the sector showed deceleration in the next period (2.6%). It returned to gain rhythm in the third quarter (6.4%) and in the last quarter of the year (6.8%), when it remained slightly above the overall industrial growth (6.3%).

Industrial products that derive from agriculture

The group of products that derive from agriculture, of major participation in the agribusiness, presented growth of 4.6%. Among the six sectors that increased the production, we can stand out: tobacco (20.0%), orange (5.2%), cellulose (6.0%) and sugar cane products (1.8%). Only the soybean products (-1.1%) and corn (-22.5%) pressured negatively, but did not revert the overall positive result. According to the Systematic Survey of Agricultural Production (LSPA), the initial expectancy for the production of soybeans was of a record harvest of 51,5 million tons. This occurred due to the technology used, to the excellent harvests obtained in the last years and to the growth of the world demand boasted by China in combination with high international prices. Nevertheless, significant changes in the climatic conditions, such as the drought that devastated the Southern states, changed the initial estimate, registering for 2004 a production of 49,2 million tons, which is 4.5% below the initial estimate. Regarding corn, we could observe that the trend of fall is associated with the dissatisfaction of the producers regarding the price of the product, which favored the sowing of other cultures instead of corn.

Industrialized products used by agriculture

The sector of industrialized products used by agriculture while obtaining expansion of 1.1% did not repeat the positive behavior of the last years, when it registered rates of 14.2% in 2002 and 11.9% in 2003. In this group, composed by industrial inputs and agricultural capital goods, the slight increment is a result of the growth of 6.0% in machines and equipment, since the production of adobes and fertilizers showed a slight recoil (-1.4%). The decision of the producers in anticipating the acquisitions for the next harvest (2004/5) has been maybe negatively influenced by two factors. One was the high prices of industrial inputs, mainly due to the elevation in the production costs, and the second was the changes in the expectancy of the Brazilian producers in relation to the future price of soybeans. In the case of machines and equipment, two factors contributed for a less favorable performance production of these goods in relation to what was observed in 2003 (22.1%). One was the delay in the supplying of resources of the Program of Agriculture Modernization (Moderfrota-BNDES) between July and September, and the second was the increase in the prices of the machinery, due to the rise in the price of steel. In spite of a less dynamism of the domestic demand, the production of agricultural equipment sustained itself mainly due to foreign sales. According to the National Association of the Manufacturers of Vehicles (ANFAVEA), the physical exports of agricultural machines grew 44.7% in 2004, compared to the previous year.

Livestock Products

This group of products presented expansion of 4.9% in 2004. In this period, the production of cattle and pork increased 10.8%, which was the best result of the whole time series. The record performance of this sector occurred mainly due to the rise of international prices for Brazilian meat, boasted by supply restrictions which occurred due to sanitary problems faced by great producers in the World, such as the European Union. Brazil also took advantage of market opportunities that arouse because of the avian influenza, which affected, mainly, the Asian countries. The sub sector poultry products (4.4%) also showed a positive behavior in the year, and we can stand out that Brazil is now one of the main world producers of chicken. Another group with favorable performance was the one of leather and furs, which expanded 6.5%. On the other hand, the only one with a negative performance was observed in the milk sector (-2.1%), typically associated to the domestic demand.

Industrial products used by livestock

In the end of the year 2004, the category of industrial products used by livestock once again presented expansion (5.4%), after a significant reduction in 2003 (-8.3%). Among the two sub sectors that compose this category, we can observe the one of dosed veterinary products, which presented growth of 10.6%, mainly due to the increase in the production of vaccines, an item that recovered from the recoil of 31.4% recorded in 2003. The increase in the production of vaccines against foot-and-mouth disease in 2004 may explain this change. The production of rations (4.5%) also recovered in relation to the closing of 2003 (-1.8%).

In synthesis, it could be observed that the increment of 5.3% attained by the agribusiness in 2004 was particularly influenced by the exports, due to the increase in the international prices of important products of this sector. This stimulated the expansion of the harvest and its following processing by the industry. Also, the growth of agribusiness was determined by the opening of new markets. Even with the performance in the production of machines and agriculture equipment it was possible to identify a positive influence of the foreign sector. We could observe that the increase in the foreign sales contributed to produce growth in the segment during the year, since in the domestic market the sales of agricultural equipment lost dynamism during 2004.