View Full Version : Brasilian farmland investment

09-13-10, 12:27 PM
If this is inappropriate, feel free to delete it. I am not trolling for investors, just making iTuliper's aware of this...

I will be speaking with someone in a few hours regarding purchasing into a limited group for Brasilian farmland. This is land already in production, will be growing cotton, and most importantly, it is to be run by an American operator and is "grandfathered" in under the recent ruling regarding foreign ownership of farmland in Brasil.

The purchase will be of an existing US LLC that owns an existing Brasilian coporation that owns the land, so all the legal issues are already long done. Should current cotton pricing remain, returns in the high singe to low double digits whould be easily attainable.

If anyone is interested in this kind of opportunity drop me a line with your email & I will pass it on. I am NOT part of the management group, I have NO vested interest in anyone joining up, I am just passing this along as a rare opportunity to get into a Brasilian farm group with a very good operator.

I do not know what their minimum investment is, but I would imagine at least $250k, but probably closer to $500k.

09-13-10, 04:23 PM
after the call, I feel I am still presently better off investing in Uruguay unless some parts of the deal change.

THAT SAID, if you are interested in what is happening in Brasilian agriculture, check the following...




09-13-10, 04:55 PM

09-13-10, 06:27 PM
yup, sounds right to me. Uruguay is kind of ignored yet it has plenty of good farmland. even without water. and the whole country sits on a pretty large aquifier, though pumping would have a significant impact on yields...

10-01-10, 11:17 PM
http://www.google.com/hostednews/afp/article/ALeqM5h4VxMdWNXtKooaBP9uoW7h3jeQRw?docId=CNG.6ae9a a0fe55fb9cafaf419f485bc88d5.e01

Brazil: a big boom dogged by persistent handicaps
By Anella Reta (AFP) – 2 days ago

SAO PAULO — Forget the samba and the beaches, Brazil has successfully carved out a new reputation as Latin America's economic power -- "the world's farm," the future oil exporting giant, the land of corporate opportunity.

That transformation, effected over the eight years of President Luiz Inacio Lula da Silva's reign, looks stable enough to continue whoever succeeds Lula in elections this Sunday.

Indeed, this year growth is forecast at over seven percent. The International Monetary Fund already ranks Brazil's economy as the eighth biggest in the world.

But corruption, bureaucracy, poor infrastructure, sliding competitivity due to a strengthening currency -- the famous "Brazil cost" of doing business -- are also present, continuing to handicap development in this vast country of 193 million people.
With the boom, though, optimism has the upper hand.


10-01-10, 11:36 PM

Profit From Brazil’s New Middle Class Consumers

Sep. 27, 2010

I’m in Brazil with a group of readers. At least one has figured out what he thinks is the best investment idea of the trip so far.

In our meetings, we met an economist who got everyone’s attention when he started talking about Brazilian financial products and how he’s averaged 25% a year in the last few years without doing any work (I’m suspicious). Asked how to get into these products, he said they are open only to Brazilian residents. Initially, he made his investments through his wife, who is Brazilian.

This led the reader to say, “I’m going to invest in a Brazilian wife.”

While that may not be a bad investment for some, the opportunities in Brazilian agriculture are what inspire our trip.

We started in Campo Grande, which is in an interior state called Mato Grosso do Sul. It is a big producer of soybeans, sugar and more. Seasonally, we’re at the end of what passes for winter in these parts. Yet temperatures hit 100 degrees while we were out and about. It was dry and dusty with strong winds.

Water comes from nearby rivers and a huge underwater aquifer. There is also a healthy amount of rain for about half of the year. The land is also flat. Professionally managed, it becomes highly productive farmland.

Anyway, we endured the heat and some long bus rides to see farmland properties in the cerrado, the vast grasslands of Brazil and the soil bank of the world.

This is the land that will help feed the growing global population. Brazil is a great beneficiary of that need and has become an agricultural power. (One that’s fuelling more than a few small-cap stocks right now) It also has a lot of room to go, as it has more usable arable land than any other country in the world.

The New Middle Class of Brazil

This really gets to the heart of change in Brazil. There is a rapidly expanding middle class here. Over the last six years, Brazil’s added some 30 million middle-class consumers. They are only starting to enjoy products we take for granted, like yogurt. “Brazilians are eating yogurt for the first time,” Renato Roscoe told us.

Renato is a soil expert and former Embrapa hand. (The latter is a government agribusiness research institute). He holds a Ph.D. in soil science and knows these lands well. He gave our group a good presentation before we embarked for our farmland tours. In that presentation, he also made some interesting remarks on the politics of Brazil.

“We’re happy because we are getting richer,” Renato said. That happiness is reflected in voter patterns. Whereas the incumbents are in trouble in the U.S., in Brazil, they enjoy widespread support. Of the 26 states that will elect governors this year, 18 will re-elect their existing governors or vice-governors by wide margins. And Dilma Rousseff is way ahead nationally in part because she is seen as continuing the policies of President Lula.

Not only is the middle class expanding, but Brazil is also minting millionaires. Only nine countries have more millionaires than Brazil, according to one study cited by Larry Rohter in his new book Brazil on the Rise. “With about one-sixth the population of India, Brazil has more millionaires than India,” he writes.

Rohter goes on:

“In a matter of a few years, Brazil has seen a new surge in entrepreneurs who have built fortunes from activities as diverse as airlines, cosmetics, slaughterhouses, shoes, toys and computers… This phenomenon, particularly notable in sectors such as agriculture and ranching and oil and mining, was accompanies by a burst of spending on luxury items ranging from jewelry and designer clothing to private airplanes and yachts.”

Given that context, you can understand some of the success companies are having in Brazil. Whirlpool is one example. According to the company, one in six Brazilians already has at least one of its appliances. In agriculture, AGCO — a maker of farm equipment — saw sales in South America rise 71% in its second quarter, thanks mostly to Brazilian farmers.

Then there are the Brazilian companies. Vale, the giant mining firm, is looking to become one of the world’s largest fertilizer companies. It wants to boost potash output tenfold by 2017 and triple its output of phosphates. It will do this through acquisitions and investments in its own mines. Clearly, it sees the opportunity to serve farmers in its own backyard.

I’m looking at other opportunities to tap into Brazil’s growing markets and have much more to share with you. But for now, I have to sign off. The giant metropolis of Sao Paulo is up next…


Chris Mayer (http://pennysleuth.com/author/chrismayerpenny/)

Penny Sleuth (http://pennysleuth.com/)

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10-19-10, 03:10 AM
<META name=Generator content="Microsoft SafeHTML"><STYLE>.ExternalClass .ecxhmmessage P{padding:0px;}.ExternalClass body.ecxhmmessage{font-size:10pt;font-family:Tahoma;}</STYLE>http://www.washingtonpost.com/wp-dyn/content/article/2010/10/16/AR2010101603087.html (http://www.washingtonpost.com/wp-dyn/content/article/2010/10/16/AR2010101603087.html)

Brazilian scientists turning nation into an agro-power

By Juan Forero
Sunday, October 17, 2010; A17

CRISTALINA, BRAZIL - Barely two generations ago, the gently rolling hills here in Brazil's heartland were a knot of short, brittle trees and acidic soil considered unfit for agriculture. But on a recent morning, a New Holland harvester cut through golden husks of wheat on Paulo Kramer's farm.

Wheat, of course, is a temperate crop that flourishes in places like Kansas and South Dakota. But here in Brazil's Cerrado, a wide savanna that covers nearly a quarter of the country, wheat varieties created especially for tropical climates and nutrient-poor soil bloom alongside corn, soybeans and cotton.

Once seen as a wasteland, the Cerrado is now the motor of an agro-industry so potent that Brazil threatens to surpass the United States as breadbasket to the world. The answer to how that transformation happened can be found at a government-run agricultural research center, called Embrapa, where scientists make Brazil's poor soils fertile while developing crop varieties that will thrive here, including wheat.

"When we started to plant in the Cerrado, I could never have imagined we'd be planting wheat," said Kramer, 50, who came here from southern Brazil in the 1980s and has 1,700 acres of farmland. "Wheat was for cold climates."

As Brazil prepares to elect a successor to President Luiz Inacio Lula da Silva on Oct. 31, the Latin American giant is widely considered an economic success story among emerging markets. Some analysts say its economy could become the fifth-largest by 2016, when the Olympic Games are staged in Rio de Janeiro. Brazil's increasingly diverse industry also produces automobiles, refrigerators, fighter planes and deep-sea oil platforms.

Brazil, however, is perhaps best known as a dominant power in the exportation of foodstuffs, from meat to poultry, orange juice to coffee. Other rising giants, most notably China, cannot get enough of Brazil's soybeans and beef, two signature exports. And poorer countries struggling to produce food, such as Venezuela and several African countries, want to emulate its success.

That has made the Brasilia headquarters of Embrapa, which stands for the Brazilian Agricultural Research Corp., an essential stop for foreign agriculture ministers and dignitaries curious about how Brazil made the Cerrado green. In turn, under a directive from Lula, Embrapa is sending its scientists as near as Venezuela and as far as Mozambique to improve production.

"What's happened there is the equivalent of the Green Revolution," said Andrew Colin McClung, an American whose work in the Cerrado in the late 1950s helped set the stage for Embrapa's innovations years later. "It's hard not to overemphasize their importance."

In the years since American farming went into overdrive, setting an example to be replicated worldwide, McClung and two Brazilian scientists would determine that the Cerrado could be made green by adding lime, phosphorus and other nutrients.

In 1973, whipsawed by oil shocks and facing the challenges of feeding the country's burgeoning population, the military dictatorship then ruling Brazil founded Embrapa. A collection of laboratories went up in the Cerrado, in tiny Planaltina outside of Brasilia.

Embrapa administrators knew their endeavor would not be fulfilled overnight, so they started by sending 1,200 young scientists to the best American and European universities for their master's degrees and doctorates.

By the 1980s, with hundreds of American-trained Brazilian scientists at work at Embrapa, the Cerrado began its transformation, and Brazil went from exporting coffee, cacao and sugar to developing dozens of major products for export. Lured by cheap land and government credit, thousands of farmers began migrating from southern Brazil into the Cerrado, which now accounts for two-thirds of Brazil's agricultural output.

"This is a country that only 40 years ago had problems feeding the population," said Francisco Souza, a Mississippi State-educated tropical seed expert and head of Embrapa's international wing. He recalled how meat was imported from Argentina, beans from Mexico, rice from the Philippines.

"How can you go, in 30 years, from importing all the food to becoming the first- or second- or, at least, the third-largest exporter?" he asked. "The main driving force has been the technology."

Among those who have made a career developing that technology is Thomaz A. Rein, a soil scientist educated at Cornell University who started at Embrapa in 1984. In a tour of Embrapa's test fields in Planaltina, he talked excitedly of a new phosphorus fertilizer for sugar cane and a nitrogen fertilization experiment with corn.

"We see here the big difference," Rein said, standing beside another test field, this one planted with wheat. "The wheat fertilized with sulfur are taller, and we will have good yield."
In the Planaltina labs, scientists have also developed dozens of varieties of soybeans, corn, cotton and other crops while finding methods to contain plagues. Bovine experts have been working on how to fatten up cattle and hogs faster and more efficiently while improving the quality of the meat. Such work can be found at 45 Embrapa labs nationwide, each of which is entrusted with improving the crops common to Brazil's far-flung regions, like the palm oil produced in the Amazon.

Improving Brazilian agriculture is vital, said Embrapa officials, because agribusiness accounts for a quarter of GDP and 40 percent of exports. But there is potential for more, because only a fraction of the land Brazil could farm is being cultivated.

Pedro Antonio Arraes, who is president of Embrapa and received his doctorate in genetics and plant breeding from the University of Wisconsin, said Embrapa's role is to improve production per acre so Brazil uses its land efficiently. During an interview, he announced that he would hire an additional 400 researchers by year's end, part of a sustained buildup that saw the budget rise 29 percent last year.

"We are in research and development. We have to produce papers, but that's not our main objective," he said. "What's important is, you have to provide innovation. You have to provide competitiveness for agro-business."

On Kramer's farm here in Cristalina, the competitive advantage came through two new wheat varieties, dubbed BRS 254 and BRS 264. Kramer says the roots of these sturdy varieties dig deep into the soil. They have also proven resistant to disease, he said, and are so productive that he can plant and harvest faster than an American wheat farmer. "Embrapa advises producers on the varieties to plant," Kramer said. "They give us the right guidance in planting so we do not make mistakes."