In the first semester of 2011, the Brazilian agriculture industry decreased by 3.3%, a result below the one obtained in the same period of 2010 (6.0%) and below the one registered by the overall industry in the first six months of the year (1.7%).

That was attributable to the contraction of agricultural products (-4.7%), mainly sugar cane products (-25.4%), which suffered from climate problems and lack of investments in the replanting during the international economic crisis. Another relevant negative contribution came from agrochemical products (-26.7%), affected by the increase in imports, due to the low rate of the dollar in the first semester.

The sectors related to agriculture (-3.1%), which account for the biggest contribution to agriculture industry, had a worse performance than the sectors related to livestock, which grew by 1.0%. The group insecticides, herbicides and other substances for agricultural use decreased by 26.7%, negatively affected by the expansion of imports; on the other hand, Wood increased by 5.3%. An analysis by quarter shows that agriculture industry recorded negative results in the first (-3.8%) and in the third quarter of 2011 (-3.0%). 

In spite of the decrease of agriculture derivatives in the first semester of 2011 (-4.7%), mainly due to sugarcane derivatives (-25.4%), the prospect for the grain harvest this year, according to the Systematic Survey of Agricultural Production (LSPA), is about 158.8 million metric tons, a figure 6.2% above the record harvest of 2010 (149.6 million metric tons).

In terms of the external sector, according to statistics of the Foreign Trade Secretariat (SECEX/MDIC), exports of the agriculture business in the first semester of 2011 totaled 43.2 billion dollars, with increase of 23.4% compared to the same period in the previous year. According to data of SECEX, the volume exported increased considering the following products of agriculture industry: poultry pieces and offal (8.4%), poultry meat not cut into pieces (4.1%), bovine leather and rawhides (9.4%), crude petroleum oil (28.1%) and bagasse and other residues from soybean oil extraction (8.4%). On the other hand, there were decreases in sugar (-10.4%), alcohol (-17.7%), frozen beef (-16.7%), frozen pork (-1.1%), pulp (-1.5%), tobacco (-8.2%) and ground soybeans (-2.0%).

Agricultural derivatives fall by 4.7% in 2011

The sector of industrial products obtained from agriculture decreased by 4.7% in the first semester of the year, with negative results in four of the eight subsectors surveyed. The decline of output faced by sugarcane derivatives (-25.4%) occurred due to the smaller production of crystallized sugar (-24.8%), and alcohol (-27.7%). Sugarcane derivatives were affected by the reduced harvest, not only due to harsh climactic conditions (drought in the period of plant growth and excess of rain, causing delay in the harvesting period), but also to the reduction of investments in the renewal of sugarcane plantations (as a result of the international economic crisis that led to lower productivity). Other negative contributions were: wheat derivatives (-1.8%), due to the reduced harvest, corn (-0.9%) and onions (-59.7%). There were increases in soybean derivatives (1.4%), affected by the expansion of harvests,  pulp (1.5%), tobacco (7.0%) and rice (17.9%), a product directed to the internal market above all, as a result of the decrease of output. 

Industrial products used in agriculture increased by (17.8%), since the production of machinery and equipment decreased by 5.9%. The production of manure and fertilizers was stimulated by the expansion of agricultural income, as a result of a bigger harvest and of the rise of prices of some commodities. On the other hand, the investment in tractors and harvesters was mainly influenced by the high basis for comparison, since this sector grew by 50.0% in the first quarter of 2010. In terms of the foreign market, there was increase of the number of harvesters exported (32.6%) and decrease of the exports of wheel tractors (-3.1%), according to data provided by the National Association of Motor Vehicle Manufacturers (ANFAVEA).

Livestock derivatives record stability

Industrial products obtained from livestock represented increase of 1.4%, affected by the internal market; the subsector of leather and rawhides recorded expansion of 5.3%, supported by the expansion of exports. On the contrary, the only decrease occurred in the subsector of milk (-4.3%), due to the dry period and the low temperatures in important producing areas, what did harm to pastures and caused fall of productivity. 

The sector of industrial products used by livestock grew by 4.8%, as a result of the 4.1% increase in the production of anima food and vitamin supplements, of greater relevance to the sector, and increase of 7.5% in the production of veterinary items.