Overhead costs for soybean farmers in Brazil’s largest growing state rose 1.8% versus 2017, as higher domestic freight costs and a recent strengthening in the real drove prices higher, Mato Grosso’s agricultural economic institute (IMEA) said late Monday.

Overheads came in at BRL3,168.89/ha ($844.3/ha), up 1.8% on the year, while variable costs came down 0.7% BRL2,871.6/ha ($774.87ha), leaving the weighted average of the total cost of production to rise 1.1% on the month, data from a farm survey by the IMEA showed.

The institute said that farmers who locked in their costs early on got a significant gain compared to those who left the cost of their inputs until the start of sowing.

The rise in costs was mainly driven by a hike in minimum freight prices for Brazilian truckers which raised the costs of transporting farm inputs such as fertilisers from ports to farms.

IMEA data showed that for a farm in Mato Grosso's Sorriso, the freight cost per tonne rose to BRL355/mt ($95.79/mt) in October, up 16.4% since early May.

The average freight cost during October over the past five seasons was BRL290.99/mt.

During the second half of May, Brazil's truckers launched a two-week strike that almost paralysed the country and ended with the president brokering a deal to increase minimum freight prices, which has seen cost of goods rise across the country.

agricensus