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Almanaque AprosojaOpportunities in Brazil´s
Agribusiness
October, 2010
Agribusiness
Opportunities in Brazil
October, 2010
APROSOJA
• Mato Grosso Soybean and Corn Growers Association
• Founded in February 2005
• 5000 Growers in 19 Districts
• Farmers pay...
Focus on
Farmers Needs
Leadership
Training,
Information
and Education
Policy
Advocacy
Communications
and PR
Research
Marke...
World Overview
Land Use in BrazilLand Use in Brazil
Food Demand and Production
THE UNITED NATIONS
PROJECTS WORLD
POPULATION OF 9
BILLION ...
World Trends in Food Demand
Evolution of the per capita consumption of food Per capita consumption of food in the world
Gr...
Brazil’s Competitiveness
Overview – Brazil
Source: CIA Factbook / MAPA
Area
8.5 million km2 (5th largest)
Population
199 million (6th largest)
GPD ...
• Although affected by the global downturn
of recent years, the next five years are
forecast to be a period of steady grow...
Brazilian Production Growth
Brazilian Meat Production Growth
Brazilian Soybean Production Growth
Million tons
Brazilian Co...
Regular Rainfall
0
100
200
300
400
Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May
AverageRainfall(mm)
Maranhão Mato Gross...
Total
area
Amazon
forest
Pantanal Cerrado Indian
reservation
Available
land
851
420
15
303
29
84
105
79
120
Virgin a
Pastu...
Increasingly, land use will be intensified, and pasture
areas will be converted into high tech crop fields
Pasture Land
12...
Brazil´s Agriculture is considered a reference and an
example on how to feed the world…
Mato Grosso State
Overview – Mato Grosso (MT)
Source: CONAB
Area
906.807 km2 (3rd largest in Brazil)
Population
2.85 million
GPD Annual Grow...
Current Agricultural Production – Mato Grosso (2010)
Source: IMEA
Soybean
18,80
Million tons
Corn 2° Crop
8,21
Million ton...
Soybean Production in Brazil – Mato Grosso is the
largest producer in the country
Source: Conab / Elaborated by Aprosoja
S...
Large Scale Farm in Mato Grosso – Soybean harvest and
corn planting in the same day (January-March)
Soybean
Harvesting
Cor...
Standard Deviation
Expected Yield
239 a 485
179 a 239
128 a 179
31 a 128
Average Yields and Production Risk in Brazil
Avar...
Source: Aprosoja
SOYBEAN AREA
Waterways Roads Railroads
Logistics Infrastructure
The main weakness of Mato Grosso, its log...
Transportation Cost Reductions with BR 163
Sorriso – A. Araguaia, MT
835 km
Alto Araguaia - Santos, SP
1.100 km
Source: Ap...
Source: Cargill
Santarém- PA
Porto Velho - RO
• 2 Ports
• 7 Storage Facilities
• 43 Barges, 5 Towboats, 2 “Bull Truster”
(...
Business Opportunities
Credit to Farmers Timber
Grains Storage Transportation
Infrastructure
Business Opportunities in Mato Grosso
Source: Aprosoja
Rondonopolis
Midwest Railroad
Midwest Railroad – A Railroad in the Heart of Brazil’s
Corn and Soybean are...
Next Steps
Understanding the scope and business opportunities to be addressed1
Agreeing on the following steps4
Drawing a ...
Marcelo Duarte Monteiro
CEO
marcelo@aprosoja.com.br
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Agribusiness Opportunities in Brazil

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Transcript of "Agribusiness Opportunities in Brazil"

  1. 1. Almanaque AprosojaOpportunities in Brazil´s Agribusiness October, 2010 Agribusiness Opportunities in Brazil October, 2010
  2. 2. APROSOJA
  3. 3. • Mato Grosso Soybean and Corn Growers Association • Founded in February 2005 • 5000 Growers in 19 Districts • Farmers pay compulsory checkoff of US$ 1 per hectare • Founder of Aprosoja Brasil, ARES, Instituto Ação Verde • International partnerships • Main goal is to increase competitiveness of Mato Grosso corn and soybean farmers. • 31% of Brazil’s soybean production and 16% of the country’s total corn production Aprosoja
  4. 4. Focus on Farmers Needs Leadership Training, Information and Education Policy Advocacy Communications and PR Research Market Development Aprosoja – What we do
  5. 5. World Overview
  6. 6. Land Use in BrazilLand Use in Brazil Food Demand and Production THE UNITED NATIONS PROJECTS WORLD POPULATION OF 9 BILLION PEOPLE BY 2050 BRAZIL: AGRICULTURE SUPERPOWER – AVAILABLE LAND AND WATER BRAZIL: SKILLED PEOPLE AND TECHNOLOGY: KEY TO INCREASE AG PRODUCTION FAO: WORLD NEEDS TO PRODUCE 70% MORE FOOD FOR ADDITIONAL 2.3 BILLION PEOPLE BY 2050
  7. 7. World Trends in Food Demand Evolution of the per capita consumption of food Per capita consumption of food in the world Growth of the per capita incomesWorld Rural and Urban Population Billionsofpeople Rural Urban (kg/person/year) (kcal/person/day) Annualaverage Source: FAO / UN / Icone
  8. 8. Brazil’s Competitiveness
  9. 9. Overview – Brazil Source: CIA Factbook / MAPA Area 8.5 million km2 (5th largest) Population 199 million (6th largest) GPD (2008) US$ 1.99 trillion (10th largest) 1st Coffee Orange Juice Sugar Beef Soy 2nd Poultry Meat 3rd Corn Milk Grapes Pork 4th 5th Cotton Food Rank – Brazil is a Major Global Producer of Commodities
  10. 10. • Although affected by the global downturn of recent years, the next five years are forecast to be a period of steady growth and continued stability • One of the 10 biggest economies in the world • Conservative monetary and fiscal policies (i.e. control of government expenses and inflation targeting) • Credibility from international governments and financial community • Significant growth in direct investments • The current government has strong public support 6.1% 5.1% 7.2% 4.2% 4.5% 4.5% 4.5% 4.5% -0.2% 2007 2008 2009 2010e 2011e 2012e 2013e 2014e 2015e 4.5% 5.9% 4.8% 4.5% 4.5% 4.5% 4.5% 4.3%4.3% 2007 2008 2009 2010e 2011e 2012e 2013e 2014e 2015e Consumer Inflation (% p.a) Real GDP Growth (% p.a)Brazil Highlights Brazilian Economy Source: BCB / Macroconsulting
  11. 11. Brazilian Production Growth Brazilian Meat Production Growth Brazilian Soybean Production Growth Million tons Brazilian Corn Production Growth Brazilian Cotton Production Growth Source: Agrocosult / MAPA Area (million ha) Production (million tons) 8,02 9,92 3,24 3,95 11,62 16,63 0 2 4 6 8 10 12 14 16 18 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Beef Pork Poultry Area (million ha) Production (million tons) Area (million ha) Production (million tons)
  12. 12. Regular Rainfall 0 100 200 300 400 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May AverageRainfall(mm) Maranhão Mato Grosso Australia USA (1) Source: USDA (1) Memphis Source: FAO / Rabobank Land Use in BrazilFresh Water Availability Stable Temperatures and Abundant Solar Energy Land Use in BrazilAvailability of Farmland Europe, 7% Brazil, 12% of World's Fresh Water Africa, 9% Asia, 32% Australia and Oceania, 6% Rest of Americas, 34% (10) 0 10 20 30 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May AverageTenperature(ºC) USA Corn Belt Mato Grosso Paraná MMhectares Brazil: Enormous Agricultural Potential Current Available Source: FAO, MAPA, UN, SLC
  13. 13. Total area Amazon forest Pantanal Cerrado Indian reservation Available land 851 420 15 303 29 84 105 79 120 Virgin a Pasture Currently with crop production Note: (1) Approximately 70% of the total gross area can’t be used in agriculture and has to be destined to legal reserves Brazilian Land Availability Breakdown (Million hectares) Source: Embrapa and FNP - Elaboration Macroconsulting Agricultural Farmland in Brazil The great amount of available arable land along with a great rainfall level gives Brazil an unbeatable combination. Brazil has the potential to more than double its grain area only by converting current pasture land.
  14. 14. Increasingly, land use will be intensified, and pasture areas will be converted into high tech crop fields Pasture Land 120 Million Hectares Row Crops Forestry Source: Aprosoja
  15. 15. Brazil´s Agriculture is considered a reference and an example on how to feed the world…
  16. 16. Mato Grosso State
  17. 17. Overview – Mato Grosso (MT) Source: CONAB Area 906.807 km2 (3rd largest in Brazil) Population 2.85 million GPD Annual Growth 8% 1st Beef Soy Corn 2ndCotton Brazil Food Rank – Mato Grosso is a major food and fiber producer Evolution of Mato Grosso Grain Production (Last 23 years) MT Area (000 ha) Production (000 Tons)
  18. 18. Current Agricultural Production – Mato Grosso (2010) Source: IMEA Soybean 18,80 Million tons Corn 2° Crop 8,21 Million tons Beef Cattle 27 Million Heads Cotton 1,44 Million tons
  19. 19. Soybean Production in Brazil – Mato Grosso is the largest producer in the country Source: Conab / Elaborated by Aprosoja Soybean Production in Brazil Millions of Hectares and Millions of Tons Area Production 13,6 14,0 16,4 18,5 21,4 23,3 22,7 20,7 21,3 21,7 23,5 23,2 32,9 38,4 42,2 52,0 49,8 52,3 55,0 58,4 60,0 57,2 68,5 65 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 69 56% 36% 8% Share Production (%) CAGR 7,61% Brazil is the second largest soybean producer in the world and 31% of this production is concentrated in Mato Grosso state. MATO GROSSO
  20. 20. Large Scale Farm in Mato Grosso – Soybean harvest and corn planting in the same day (January-March) Soybean Harvesting Corn Seeding No tillage (environmental friendly) • Two crops in the same year – soybeans followed by either corn or cotton • Scale, mechanization, technology • No irrigation
  21. 21. Standard Deviation Expected Yield 239 a 485 179 a 239 128 a 179 31 a 128 Average Yields and Production Risk in Brazil Avarege Yield: Source: Kleffmann Group / Standard Deviation: Source: Burgo, Marcelo Nery , ESALQ/USP Piracicaba, 2005 Above Average Average Below Average Average Yields of Soybeans Standard Deviation of Yields of Soybeans Mato Grosso state has the highest soybean yields per hectare …and the lowest production risks…
  22. 22. Source: Aprosoja SOYBEAN AREA Waterways Roads Railroads Logistics Infrastructure The main weakness of Mato Grosso, its logistics infrastructure also represents an opportunity as new projects of roads, railroads and waterways are being developed
  23. 23. Transportation Cost Reductions with BR 163 Sorriso – A. Araguaia, MT 835 km Alto Araguaia - Santos, SP 1.100 km Source: Aprosoja Total: 1.935 km Route Ferronorte Sorriso – Santarém, PA 1.344 km Total: 1.344 km Cost Reduction: US$ 30/Ton Route BR 163 Conclusion in 2013SOYBEAN AREA
  24. 24. Source: Cargill Santarém- PA Porto Velho - RO • 2 Ports • 7 Storage Facilities • 43 Barges, 5 Towboats, 2 “Bull Truster” (Transportes BERTOLINI) • 650 Trucks Case of Success in Soybean Logistics: Madeira River Cost Reduction: R$ 70,00/Ton SOYBEAN AREA
  25. 25. Business Opportunities
  26. 26. Credit to Farmers Timber Grains Storage Transportation Infrastructure Business Opportunities in Mato Grosso
  27. 27. Source: Aprosoja Rondonopolis Midwest Railroad Midwest Railroad – A Railroad in the Heart of Brazil’s Corn and Soybean area Source: Ministério dos Transportes, IBGE, ANTF and CIA Factbook. International Benchmarking Midwest Railroad • 1.630 km - Uruaçu/GO - Vilhena/RO • Campinorte/GO - Lucas do Rio Verde/MT – 1.004 km - R$ 4,1 Billion. • Lucas do Rio Verde/MT- Vilhena/RO - 626 km - R$ 2,3 Billion. • Conclusion - 2014 SOYBEAN AREA
  28. 28. Next Steps Understanding the scope and business opportunities to be addressed1 Agreeing on the following steps4 Drawing a Memorandum of Understanding (MoU) regarding the identified opportunities 3 Evaluating and agreeing on alternatives to support and develop the business opportunities 2
  29. 29. Marcelo Duarte Monteiro CEO marcelo@aprosoja.com.br
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