Ipea reduces 2021 GDP estimate for Brazilian agriculture and livestock from 2.6% to 1.7%

RIO DE JANEIRO, BRAZIL – GDP growth in the agriculture and livestock sector in 2021 was revised to 1.7% from 2.6% (June forecast), marking the fifth consecutive year of growth for the sector, which was the only one not to record a decline in 2020. The forecast came from the Institute for Applied Economic Research (Ipea) and was released Thursday.

According to Ipea, the adjustment of the projections was mainly justified by the decline in productivity. It estimated the production of major crops (such as corn) due to the negative climate impact of a stronger La Niña phenomenon in this crop and the deterioration of the scenario for beef production.

Regarding the added value of crop production in 2021, Ipea researchers corrected the increase from 2.7% to 1.7%. Nevertheless, the positive trend was supported by higher production of soybeans (+9.8%), wheat (+36.0%), and rice (+4.1%).

This offset estimated declines in other crops: Corn (-11.3%), Sugarcane (-3.2%) and Coffee (-21.0%). “In particular, corn yield in 2021 was severely affected by the late soybean harvest, which delayed sowing of the second crop and made one dependent on late rains, which did not materialize,” Ipea points out.

The forecast for livestock production was revised upward to 2.5% from 1.8%, with growth in all segments except beef production, which declined 1.0%. A positive trend is expected for the production of other proteins: pork (+7 7%), chicken (+3.9%), milk (+3.1%), and eggs (+4.5%). In the case of pork, the good performance is due to the sharp increase in exports to China this year.

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