The national harvest of cereals, legumes and oilseeds (seedcotton, peanuts, rice, beans, castor beans, corn, soybeans, oats, rye, barley, sunflower seeds, sorghum and triticale) is expected to reach a volume of about 113.468 million tons of grains in 2005, 4.94% less than the amount obtained in 2004 (119.369 million tons). The estimate is based on data obtained in May. The reduction occurred due to the prediction of fall of 20.88% in the production of the South region (which makes up to 34.05% of the national production). The estimates 2005/2004 show increase by region : 5.55% in the Central West (a contribution of 37.20% ), 3.14% in the Southeast (16.04%), 9.79% in the Northeast (9.04%) and 17.10% in the North region (3.67%).

Crops: May versus April 2005

In the Systematic Survey of Agricultural Production released in May, in relation to April, the highlights are harvest estimates for five products: upland cotton (-5.71%), beans - 2^nd harvest (grain) 2.55%, beans - 3^rd harvest (grain) 3.31%, corn - 2^nd harvest (grain) -5.90% and wheat (grain) -13.39%.

Beans – 2^nd harvest

shows expansion of 2.5% in May, in relation to April, with increase in expected production in the states of Bahia (7%) and Santa Catarina (49%), where productivity grew in relation to the previous month.

In relation to the May estimates for beans – 3^rd harvest, a retraction of 3.30% occurred due to the reduction of planted area in Minas Gerais. This situation, however, may still change, once planting in the main producing municipality in the state (Unaí) is yet to be concluded. In 2004, Minas Gerais harvested about 126 thousand tons of beans, whereas 89 thousand tons are expected in the beginning of this 2005 harvest.

The estimate for corn-2^nd harvest is 6% lower when compared to the predictions for April. Paraná (-16%) and Goiás (-8%), two important producing states, show reduction in estimates due to droughts and out-of-season planting.

Concerning wheat crops, there is a reduction of 13% in the estimate May/April in the main producing states: Paraná (-12%) and Rio Grande do Sul (-21%), due to the delay in planting and to the low prices of these products.

Situation of crops in May 2005 in relation to the production in 2004

Among the products analyzed, some presented positive variation in relation to the estimated production (2004): beans-1^st harvest (grain), 1.61%; beans-2^nd harvest (grain), 1.44%; castor beans 62.00%, and soybeans, 3.14%. Negative figures were observed for: upland seedcotton (-0.07%); rice in the husk , -0.33%; beans-3^rd harvest (grain), -1.17%; corn 1^st-harvest (grain), -11.28%; corn (grain), -26.48%, sorghum (grain), -25.52% and wheat (grain), -14.50%.

The production of corn - 2^nd harvest decreased by 26.48% in relation to one year ago, when 10.6 million tons were obtained. The causes of this reduction were the low prices at the time of harvesting and the delay of the rainy season, which increased the risks of losses, concerning planting out-of-season recommended by the technical calendar of most corn- producing areas. In the states, the greatest falls were observed in São Paulo (-10%), Paraná (-43%), Mato Grosso do Sul (-45%) and Goiás (-8%), resulting in a reduction of about 3 million tons of corn only in these states.

Concerning wheat, these initial 2005 estimates show significant decrease both in Paraná (- 5%), the major national producer, and in Rio Grande do Sul (-21%). At national level, a volume of 4.896 million tons is expected, far beyond the national consumption of this cereal. The data from Paraná, a state which holds about 56% of the national production of wheat, indicate decrease in the three variables considered in the survey: 5% in terms of area, 12% in terms of production and 7% in terms of productivity. Thus, in 2005, a production of 2.7 million tons of wheat is expected in the state. Despite hydric deficiency in producing municipalities located in Paraná, the low prices for commercialization of the cereal in 2004 are the main reason for the decrease observed.

In Rio Grande do Sul as well, low prices (lower than harvesting costs) demotivated wheat producers in 2005. This way, the area dedicated to wheat crops is 17% smaller than the area harvested in Rio Grande do Sul (2004), 1.2 million hectares. So, for this harvest is expected to provide 1.6 million tons of wheat, 21% less than what was obtained in 2004. Besides low prices, financial difficulties faced by producers as a consequence of serious damages occurred in the summer harvest also contributed to the decline in this harvest. The lack of investments leads to low-technology harvests and even worse productivity levels.

LIVESTOCK (Q1 2005)

Cattle

In Q12005, 6.489 million head were slaughtered, indicating a reduction of 2.43% in relation to Q4 2004, and an increase of 8.67% over Q1 2004. The highlights in terms of number of head slaughtered are the states of São Paulo, Mato Grosso do Sul, Mato Grosso and Goiás. In the Northeast region, the highlight is the state of Pará.

Considering types of animals, bulls represented 45.51%, cows 39.19% and calves 15.20% of the overall number of animals slaughtered. Increase in the number of cows slaughtered is observed in relation to Q1 2004 (35.92%). The total cattle carcass weight from Q1 2005 was 1.463 billion kilograms, 7.58% more than in Q1 2004, and 3.25% less than in Q4 2004.

Hogs and Pigs

5.331 million units of hogs and pigs were slaughtered, indicating a positive variation of 0.13% over Q1 2004 and a negative variation of 1.25% Q4 2004. The states in the South region lead the slaughtering of hogs and pigs. In the Southeast, the state of Minas Gerais is the most prominent one in this field.

In terms of carcass weight, there was increase of 5.58% in relation to Q1 2004 and of 4.08% in relation to Q4 2004. The average weight of the animals slaughtered increased, reaching 90 kilograms, versus 86 kilograms in the quarter used in the comparison.

Pullets

904.267 million units of pullets were slaughtered. A positive variation of 6.54% in relation to the first quarter of 2004 and negative variation of 2.91% over the fourth quarter of 2004 was registered. The states with the highest number of pullets slaughtered were Paraná, Santa Catarina, Rio Grande do Sul and São Paulo. Concerning carcass weight, increase of 9.00% in relation to Q1 2004 was observed, decline of 1.34% over the fourth semester that year. The average weight of slaughtered pullets was 2 kilograms.

Milk Production

In Q1 2005, 3.961 billion liters of milk were purchased by dairy companies, a positive variation of 9.47% over Q1 2004 and negative variation of 2.13% over Q4 2004. The negative figures registered in Q1 2005 may be related to the drought in some Federative Units, mainly in the southern part of the country, a fact which affected the quality of pastures. Minas Gerais is the main Federative Unit in terms of milk production, providing almost 30% of all the milk in the country. In second and third place are the states of São Paulo and Goiás.

January was the most profitable month in terms of milk purchase over the country, about 1.434 billion liters, 10.80% more than in the same month in 2004. February, on the other hand, marks the beginning of the period between harvests, although with the technological gain with the production for the last few years this problem has been reduced. Market prices are better this year than in the previous one, accounting for a favorable prospect to the sector and stimulating investments.

Leather purchase

In Q1 2005, 8.6333 million pieces were acquired by tanneries and leather companies. This number indicates a decline in production (-0.03%) in relation to Q4 2004 and a positive change 2.04% in relation to the same period that year. For tanned leather, in Q1 2005, positive changes of 0.29% and 2.95%, when compared to Q4 and Q1 2004, respectively. In the accumulated in the year, the month of March featured increased purchases of leather pieces, being followed by January. The leather came mainly from slaughterhouses (58%).

Hen's eggs

In Q1 2005, there were 482,300 million dozens of eggs, indicating a fall of 1.17% in relation to Q4 2004, and increase of 3.20% in relation to Q1 this year. The main producing states in the period analyzed were São Paulo, Minas Gerais and Paraná, representing, respectively 34.8%; 13.4% and 9.0% of the national production. In comparison with Q1 2004, production grew in Paraíba (28.5%), Amazonas (21.%), Pernambuco (18.2%) and Piauí (16.9%), related to the inclusion of new producing establishments. The major fall was in Rio de Janeiro (-13.4%), due to the high costs to maintain the activity in the state.

GRAIN STORAGE (Semester 2 – 2004)

The results of the Survey of Stocks for the second semester of 2004 indicate that the storage network for agricultural products operating in the country presented an increment of 1.4% in the number of active establishments, in comparison with the first semester of 2004. By the end of 2004, this network had 9,080 active establishments, out of which 43.3% were located in the South region, 25.4% in the Southeast region , 19.5% in the Central West region and 8.5% in the Northeast region, and 3.3% in the North region.

The capacity of storage units of conventional, structural and inflatable warehouses was 78,810,942 cubic meters, out of which a little more than 70% was concentrated in the Southeast and South regions. Graneries had 45,997,487 tons of useful capacity: 48.4% held by the Central West and 36.8% held by the South region. Silos for grains presented 34,725,022 tons of capacity all over the country. Of this total, 53.2% in the South region; 25.6% and 16.6% in the Central West and Southeast regions, respectively.

The major stocks registered on December 31, 2004 were corn (grain), 6,664,026 tons; wheat (grain), 4,253, 620 tons, soybeans (grain), 2,771,261 tons, coffee (grain), 1,375,825 tons and rice in the husk, 1,159,673 tons. When compared to the existing stocks on December 31, 2003, the stocks of rice and corn presented positive variation: 85.1% and 8.9%, respectively. For coffee, wheat and soybeans there was fall of 0.4%, 3.6% and 5.7% of stored volume.