Unprecedented flooding in May has severely affected the agricultural sector in Rio Grande do Sul, Brazil’s southernmost state and a major agribusiness zone. From April 24 to May 4th, Rio Grande do Sol received 16.5 inches of rain, affecting more than 90% of the state.
According to the USDA, Brazil is the world’s largest net exporter of agricultural goods, and is a top five producer of 34 different agricultural commodities. To date, the flooding has led to 173 deaths, approximately 1,000 people being injured, and around 600,000 people displaced. The National Confederation of Municipalities estimated $600M of losses to the livestock and agriculture sectors (a number that is expected to rise).
The numbers:
In Rio Grande do Sul, there are an estimated 22M chickens, 12M head of cattle, and 573K pigs—and no estimate on their losses yet.
Approximately 8M acres have been drastically impacted by the May flooding, which started towards the end of the summer crop season.
In addition to sending current crops swimming, the floods affected over 1.1M tons of grains at 144 storage facilities.
All of this is adding up to a predicted 3.5% recession in Brazil’s agricultural GDP compared to last year.
The challenges faced by farmers in Rio Grande do Sul because of financial constraints and damaged infrastructure could lead to reduced soybean and corn planting in the next season, further affecting Brazil’s overall crop production and international markets. The potential reduction in the area planted with soybeans, alongside the recent tax changes affecting commodity exporters, could diminish Brazil’s competitiveness in the global market, at least in the short term.
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