Gold Silver Reports — According to the Agricultural Policy Secretary for the Brazilian Ministry of Agriculture, the GDP of the Brazilian agricultural sector is projected to be R$ 548 billion in 2017 or 3.2% more than 2016. Higher grain production and increased fruit and food production, are contributing to the increase. In 2017, the overall revenues from Brazils main grain crops are expected to increase 6.3% while livestock revenues are expected to decline 2.5%.
The best preforming grain crops in 2017 are expected to be corn and soybeans while the best livestock products are expected to be hogs, milk, and eggs. Corn is expected to lead the way in 2017 with a 33.6% increase in revenue, dry beans up 38%, grapes up 30%, peanuts up 25%, tobacco up 22.6%, rice up 17.7%, cotton up 12.6%, soybeans up 7%, and bananas up 4.8%. Lower revenues are expected for onions down 53.6%, tomatoes down 31.9%, potatoes down 28.5%, wheat down 27.1%, coffee down 10.6%, and oranges down 7.3%. These estimates may be altered by the scandal that broke last Thursday implicating Brazilian companies for selling tainted meat.
The three states with the highest agricultural GDP in 2017 are expected to be Mato Grosso with R$ 78.5 billion, Sao Paulo with R$ 74.2 billion, and Parana with R$ 70.7 billion. The improved outlook for the economy is probably why the Brazilian currency has not weakened compared to the dollar. A year ago the currency was approximately 3.7 to the dollar and today it is hovering around 3.1 to the dollar. With interest rates in the United States increasing and interest rates in Brazil declining, I would have thought that the Brazilian currency would be getting weaker, but that has not been the case, at least not for the time being. The market seems to be satisfied that the Brazilian government has taken adequate measures which will allow the economy to resume growth. — Neal Bhai Reports