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August 29, 2013 1:58 pm

Brazils booming farms reap benefit of weak currency


By Joe Leahy in So Paulo

Carlos Piassi remembers the reaction from other farmers when he started planting a second annual crop at his farm near Uberlndia, in Brazils grain belt. No one believed it could be done given the semi-arid regions relatively short rainy season and long dry winter. If you had said you were going to plant a safrinha [the small harvest] here five years ago you were called crazy, he says at his farm, Fazenda Campo Alegre. The naysayers were wrong. The safrinha between last year and this has about tripled, he said.
Bloomberg

That Brazil has risen in recent decades to become an agricultural power is no secret. It dominates the sugar, coffee and orange juice markets and competes with the US to be the worlds biggest soyabean exporter. What is less understood is that the transformation is not only continuing, it is gaining pace. Indeed, Brazils robust agricultural sector is promising to help Latin Americas largest country weather one of its toughest economic periods in a decade as a consumer-driven boom slows. And a recent 15 per cent plunge in the value of its currency, the real, against the dollar is set to give further impetus to the sector by reducing rising costs that were making its exports uncompetitive. The devaluation of the real has been a complete game-changer, said Giovana Arajo, an agribusiness analyst at Brazils Ita BBA bank. Using new varieties of seeds that have allowed them to shorten soya and corn crop cycles, Brazilian farmers in the countrys centre-west savannah areas have moved from planting one crop to incorporating the second, the safrinha. In some areas where irrigation is available they are even contemplating a third harvest. The corn crop has benefited most from the safrinha. In the 2012-13 year, corn output is expected to total nearly 80m tonnes, up from about 56mt in 2011. Soyabeans, meanwhile, are estimated at more than 80mt compared with about 75mt in 2011. Agroconsult, a Brazilian consultancy, expects the safrinha to account for 56 per cent of total corn production in the 2012-13 season, and 58 per cent in 2013-14 leading farmers to joke that the second crop should now be called a safro, or big harvest. The safrinhas share of total production should continue to grow in the long term, said Marcos Rubin, an analyst at Agroconsult. The new seed varieties mean that the first crop, typically soyabeans, can be planted and harvested in 90-95 days to make way for the second harvest, typically corn, before the summer rains end. After the rains, during the long dry period, some farmers are starting to experiment with a third crop using irrigation. Brazil has the conditions to quickly double its production of corn, which today is about 80m tonnes to 160m tonnes, said Roberto de Rissi, business director of Dupont Pioneer, one of the multinationals fighting for Brazils increasingly lucrative seed business. If you had said you were going to plant a safrinha [the small harvest] here five years ago you were called crazy
- Carlos Piassi, Brazilian farmer

Dupont, which is strong in Brazilian corn, has recently also invested in a new facility in the region near Mr Piassis farm with the capacity to produce 80,000 tonnes of soya seeds a year. It is fighting Monsanto, Dow AgroSciences and Syngenta for the countrys corn and soya markets. The companies have names for their products that range from Intrasect to Powercorn to Smartstax, a genetically modified insect-resistant variety.

The dominance of the multinationals has turned Brazil into a stronghold for genetically modified crops, which account for 90 per cent of its soya-planted area and 76 per cent of corn, according to Jefferson Carvalho, an analyst at Rabobank

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30/08/2013 23:22

Brazils booming farms reap benefit of weak currency - FT.com

http://www.ft.com/intl/cms/s/0/aab8e412-0dae-11e3-9fbb-00144feabdc...

International. This year Monsanto launched the first soyabean that was developed specifically for another country, not the US, he said. Challenging the rapid growth of Brazilian agriculture are the countrys poor logistics, which lead to bottlenecks at roads and ports and higher costs. In addition, recent falls in international prices for grains are squeezing farmers margins, though the weaker currency will be a big help. Brazils strong economy in recent years has also made it hard to find workers willing to toil in the fields when they could be doing a cushy service job in a city. Today its hard to find anyone who wants to work. I cant find a driver for the truck, says Mr Piassi. Ive got two corn harvesters sitting idle because I cant rustle up anyone to operate them.

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