The Raw Milk Production Input Index of Rio Grande do Sul (ILC) ended February with a deflationary reading of 2.7%, according to a report released by the Farsul economic team this Monday (30). The drop in costs was led by the price of soybeans and corn, which ended with negative values of 4.2% and 2.4%, respectively. This directly impacts some of the biggest production costs, such as silage and concentrate. Fertilizers also fell, by 1.72%, as did fuels (down 0.37%) and energy, which fell 6.7%, reflecting the favorable seasonality in the first quarter. In the accumulated year, the indicator is showing deflation of 4.49%. This dynamic converges with the IGP-DI/FGV index. The adherence between the series shows the persistence of the disinflationary process and its pass-through to the prices of the main components of the sector's input basket. Despite these setbacks, the overall situation remains worrying. There is a disconnect between the cost of production and the price received. Both are falling, but the latter much more sharply than the former, which ends up squeezing profit margins. In the last 12 months, the cost of production fell by 7.7%, while the price received by the producer plummeted by 20%. For March, the expectation is that the impact of global conflicts will directly affect the trajectory of producer costs and the current situation will reverse, with increases in oil and fertilizer prices and a rise in soybean prices.
This text was translated by machine from Brazilian Portuguese.