The Brazilian agriculture industry fell 3.9% in the first semester of 2012, a slightly higher falling pace than the one recorded in the first six months of 2011 (-3.4%), and almost repeating the result of the general industry in the first six months of the year (-3.8%), all comparisons against the same period a year ago. The sectors related to agriculture (-5.9%), the most relevant in the agriculture industry, presented more negative performances than the sectors associated to livestock farming (-5.0%), whereas the group of insecticide, herbicide and other pesticides for agricultural use (27.4%) and the group of wood (5.9%) posted an expansion in the first semester of 2012. In a quarterly basis, the agriculture industry overall grew 4.2% in the first three months of the year, but fell back 9.9% in the April-July period.  The complete publication can be accessed at
https://www.ibge.gov.br/home/estatistica/indicadores/industria/pimpfagro_nova 

Even though the agriculture derivatives have receded in the first semester of 2012, pushed mostly by the negative results of the sugarcane derivatives (-32.4%), the forecast for the grain harvest this year, according to the Systematic Survey of Agricultural Production (LSPA) is of approximately 160,7 million tonnes, 0.4% higher than the record crop of 2011 (160.1 million tonnes).

In relation to the external sector, according to the statistics of the Ministry of Agriculture, Livestock Farming and Food Supply based on the data from the Secretary of Foreign Trade (SECEX/MDIC), the agribusiness exports in the first semester of 2012, despite the world economic deceleration, reached 44.8 billion dollars. It represents an increase of 3.7% in relation to the same period of 2011 (US$ 43,2 billion), and the imports fell from US$ 8.4  billion to US$ 8.0 billion, a drop of 4.4% in the same period. Thus, the balance of trade of the agribusiness rose by 5.7%, coming from US$ 34.8 billion to US$ 36.8 billion. According to data from SECEX, the volume of exports grew in the following products of the agriculture industry: poultry peaces and giblets (8.9%), ground soybeans (26.6%), crude soybean oil (23,7%), tobacco (19,6%), pulp (1,1%) and cattle leather and rawhides (3,1%).   On the other hand, there were drops in the exportation of sugar (-20,3%), alcohol (-31,5%), bagasse and other residues from soybean oil extraction (-4,3%), frozen beef (-4,1%), frozen pork (-2,3%) and orange juice (-9,2%).

Industrial products derived from agriculture fell 7.3% 

The sector of industrial products derived from agriculture fell 7.3% in the first semester of the year, even though just two products recorded negative rates:  sugarcane (-32.4%) and tobacco (-16.9%). The main negative influence was explained by the reduction in the production of the sugarcane derivatives, leveraged both by the drop in the production of crystallized sugar (-38.0%), and the production of alcohol (-28.5%). The sugarcane derivatives were influenced by a smaller harvest (projection of a 7.4% fall), due to a reduction of the planted area and to the lower productivity caused by harsh climatic conditions (draught in the growing period and excessive rain in the harvest period). Such drawbacks delayed the beginning of the grinding and reduced the sucrose level of the sugarcane.  Besides, the lower demand for hydrated alcohol (due to the advantage of filling up the tank with gasoline in almost all states and to the economic crises) leaded to a reduction of the investments in the renewal of sugarcane fields, causing productivity loss.   There was also a fall in the production of tobacco, explained principally by the draught in Rio Grande do Sul, the biggest producer, responsible for approximately 50% of the national production. The positive contributions came from soybean derivatives (5.4%) and from pulp derivatives (0.8%), pushed by the exports; wheat (6.2%) and rice (4.1%), products destined mainly to the domestic market; corn (0.9%) and orange (93.0%), still reflecting the fact that the last year’s crop was only processed in the first quarter 2012.

The industrial products used by agriculture rose by 2.9% in the first semester, because of the increase in the production of machinery and equipment (8.0%), since the manufacture of manure and fertilizers remained practically stable (-0.2%) in the period. In relation to the external sector, according to the data from the National Association of Motor Vehicle Manufacturers (ANFAVEA), there was a rise in the exports of wheel tractors (0.8%) and bulldozers (5.3%), whereas the quantity of exported harvesters dropped 32.9%.

Industrial products derived from livestock farming declined 5.2%

The industrial products derived from livestock farming fell by 5.2% in the first six months of 2012, pushed by the group of cattle and swine derivatives (-5.5%), influenced mostly by the fall in the exports of cattle and swine, especially for Europe and Russia (country which imposed an embargo to Brazilian beefs and pork). Negative results were observed in the segments of poultry derivatives (-8,2%) and of leather and hides (-3,9%). Conversely, the subsector of milk, a domestic product, grew 0.6%.  

The sector of industrial products used by livestock farming registered a drop of 4.4% in the January-July period of 2012, caused by the lower production of animal feed and vitamin supplements (-4.8%), very relevant in this group, as well as vet products, which shrank 2.3%.