Livestock surpassed (4.9%) agriculture (4.2%) and the production of insecticides, herbicides and other substances increased by 9.9%.

Livestock expansion surpassed (4.9%) that of agriculture (4.2%) and the production of insecticides, herbicides and other substances increased by 9.9%. The wood segment fell by 1.3%

In the first quarter of 2007, agriculture industry in Brazil grew by 4.6%, a result slightly inferior to that of national industry (4.8%), but significantly above that of the end of 2006 (1.5%). The expansion of the sectors related to livestock (4.9%) surpassed the growth of those related to agriculture (4.2%), which is more relevant to agriculture industry. The item insecticides, herbicides and other substances for agricultural use increased by 9.9%, mainly due to their use in soybean, corn and sugarcane crops. The subsector of wood fell by 1.3%, probably as a consequence of the volume exported.

Agriculture industry grew by 6.9% in the first quarter, stimulated by agriculture (9.1%), and by 2.8% in the second quarter, due to the good performance of livestock (6.8%) whereas agriculture had a rate of 1.2%.

The result of agriculture was affected by favorable climactic conditions in the first semester of 2007, especially the soybean and corn crops. The June edition of the Systematic Survey of Agricultural Production (LSPA) estimated, for 2007, a record harvest of 133,4 million tons of grains, a result 14.0% above the figure in 2006 (117,0 million tons), and 7.3% above the record harvest of 2003 (124,3 million tons).

Despite the increase of currency value, exports contributed positively to agriculture industry, due to the rise of international prices. According to the Secretariat of Foreign Trade (SECEX/MDIC), in the first quarter of 2007, in relation to the same period in the previous year, the main products in terms of volume exported by agriculture industry were: frozen bovine meat (32.7%), poultry pieces and giblets (15.6%), non-cut rooster and hen meat (35.1%), frozen swine meat (34.1%), sugarcane sugar (7.8%), alcohol (72.4%), tobacco (33.0%), frozen orange juice (9.5%) and bovine leather and rawhides (27.0%). There was increase of the exports of ground soybeans (2.2%), bagasse and other residues from soybean oil extraction (25.4%) and crude soybean oil (12.2%).

Industrial products from agriculture

The sector of industrial products from agriculture grew by 2.3% in the first semester of the year, with positive results in six of the eight subsectors surveyed. Soybean (10.6%) and corn derivatives (12.9%) were favored by the higher productivity of agriculture and by the good international prices, due to the estimates for reduction of area planted with soybeans in the United States and to the bigger demand for the production of ethanol. Sugarcane derivatives had rise of 0.4%, with reduction of production of crystallized sugar (-5.9%), the most relevant one in this group, and increase of 10.4% in the production of alcohol. This item remains on a rising trend, influenced both by the increase of internal demand, which is stimulated by the increase of the fleet of biofuel, and by the use of alcohol as an alternative to petroleum. Other positive contributions came from tobacco (0.9%), rice (1.5%) and oranges (39.9%). The Brazilian production of concentrated orange juice was benefited by the fall of the offer from Florida, due to storms and whirlwinds. Cellulose (-1.5%) and wheat (-4.5%) were the only decreases.

Industrial products used by agriculture

The sector of industrial products used by agriculture grew by 19.2%, due to the increased production of fertilizers and plant food (14.2%) and machinery and equipment (31.5%). This good performance was influenced by a low comparison basis, but also by the good international prices of soybeans, corn, sugar, alcohol and oranges. The price rise of these products contributed to investments in agricultural capital goods and to the purchase of fertilizers and plant food, which are essential to the increase of agricultural productivity. According to statistics of the National Association of Vehicle Manufacturers (ANFAVEA), exports also contributed to the growth of this sector and the number of wheel tractors exported was 3.6% bigger between the first semester of 2007 and 2006.

Industrial products from livestock

The sector of industrial products from livestock grew by 4.5%. There was increase in bovine and swine livestock (6.2%), due to the contribution of Brazilian exports to about 180 countries, especially Russia and Arabian nations. It is worth mentioning that several countries throughout 2006 and in the first quarter of 2007 eliminated or diminished the embargo to Brazilian exports of these products, due to spots of foot-and-mouth disease in herds in the states of Mato Grosso do Sul and Paraná in the end of 2005. The external sector also contributed to the increase of poultry derivatives (11.2%), influenced by exports, especially to the European Union and to Asia; and by leather and rawhides (4.1%). The subsector of milk (07.5%), affected by the reduced offer resulting from the higher prices paid to consumer lately, was the only decrease.

Industrial products used in livestock

The sector of industrial products used in livestock grew by 6.4%. The most relevant item, animal food, had increase of 6.2%, reflecting, this way, the dynamism of exports of bovine, swine and chicken meat.  The item veterinary products had increase of 7.5%, mainly due to the increased production of vaccines for the prevention of foot-and-mouth disease.

The expansion of agribusiness in the first semester of 2007 (4.6%) is related to the increase of agricultural production and to favorable external conditions. The good international quotations influenced the performances of agriculture (2.3%) and livestock (4.5%). The growth of agricultural revenue with exports benefited the sectors which generate inputs, resulting in increase of the production of agricultural machinery and equipment (31.5%), fertilizers and plant food (14.2%), animal food (6.2%) and veterinary products (7.5%). Agriculture managed to recover after the weak performance in 2006 (-0.8%); the highlight was the increase of foreign sales. The country is still the leader of chicken and bovine meat exports and is the number four in terms of exports of swine meat.