Sunday, April 28, 2013

Chat with neighbor cost of production 2014


I had a chance to catch up things with next door neighbor today.

He farms in north-central Goias state.

He is going to Agrishow also on Monday. He is driving while I am flying.
I will be back Tuesday while he is staying the week.

His family closed out 2012/13 crop with an average yield. They had a period
of 31 days without rain that took its toll.

He has been buying 2014 crop inputs with cash. So far has 30% of
2014 production locked in at reasonable prices but he is concerned
for the balance of crop inputs needed.

Fertilizer a year ago he was buying for R$ 850 per ton and this year
he is paying R$ 1250 per ton.

He also is preoccupied with lower soybean prices ahead.
It is not possible to lock in a premium price at port for next
April but multi-national offers are expected this coming week
for 2014 soybeans.

For his area in Goias state, he thinks they will start at R$38 per sac
for offers for the 2014 crop. He says it will be difficult to close any deals.
Freight variability is the big unknown.

R$38 = US$ 8.63 per bushel locally basis Goias state for 2014.
He expects bids to bounce around between R$ 36 and R$ 38/sac.

He says this barely covers the cost of production. I poked him a little
and I said its not that bad yet. He backed off a little and says to cover
all the costs of  labor, fuel, machinery payments and our land expansion,
the cash flow gets tight.

He bought land on the Goias/Tocantins border. It was pasture and
scrub brush. He is having 2nd thoughts about bringing more land
into production for 2014. It all depends on USA crop. He of course
has many questions for me as to crop prospects in USA.

This dovetails what I have included in previous newsletter as per
2014 cost of production.

Bids for Mato Grosso will likely be R$2 to R$4/sac less than Goias

I will add more soon.

Wednesday, April 24, 2013

Weather Mato Grosso trip etc

Weather has turned dry. This is normal but 2nd crop corn could have used one or two drinks.

I am going to Ag show next Monday.

I think I will go to Mato Grosso May 4/5th time frame
and check on things.

* pending  real estate closing

* check on 2nd crop corn

* get an update on the status of corn ethanol mills
   for Mato Grosso.

* visit some friends.

I will likely post some photos here from time to time.

all of this will be collated into special May newsletter update
to subscribers.

Monday, April 22, 2013

Trucks headed to Rio Grande do Sul

Soy trucks drive to Brazil's southern tip to dodge ship queue - RTRS

22-Apr-2013 13:54
  • Soy flows to Rio Grande to escape congestion
  • Extra road haulage cost offset by lower ship expenses
  • Logistic headaches for soy sector worse than ever
By Peter Murphy
BRASILIA, April 22 (Reuters) - Trucks are making a 1,600 km (1,000 mile) detour to avoid Brazil's two most congested ports, instead taking their soy crop to the country's southern tip where wait times for ships are as much as a month shorter, a shipping agent and port authority said.
The detour demonstrates the lengths the grains sector is going to this year to cope with unprecedented logistical headaches as soy output leaps and investment in infrastructure lags.
A soy crop almost one-quarter larger than last year's has strained infrastructure at those ports to the breaking point with long queues not only of ships waiting to berth, but also of hundreds of trucks sitting idle for days waiting to offload.
"This doesn't usually happen," Rio Grande port press officer Loriana Garibaldi said of the rising flux of grains there. "It's because of the queues at other ports. Here the waiting time is a lot less," she said.
Unprecedented long waits due to underinvestment and delays in revamping infrastructure have cost Brazil dearly this year, with its top soy customer, China, reported to have lost patience and cancelled some loads to buy from the United States instead.
The logistics chaos has also overshadowed what is otherwise a jubilant year for Brazil's soy sector which is set to overtake the United States to become the world's biggest producer thanks in large part to tireless research efforts to boost yields.
Pressing on to Rio Grande where queues are shorter than at the two main grains ports, Santos in Sao Paulo state and Paranagua in neighboring Parana, cuts ships' demurrage costs and crew wage bill, offsetting the expense of the longer road trip.
Charterers typically pay between $15,000 and $25,000 in demurrage or ship rental per day.
The queue of vessels at Rio Grande port in the southern state of Rio Grande do Sul is now about three times longer than a year ago, according to shipping agency SA Commodities/Unimar, with 46 ships waiting by last Friday.
But that queue is only half the length Paranagua's and shorter than in Santos where 59 ships were waiting to load last Friday.
"Rio Grande has good infrastructure and is close to the southeast so they're sending quite a lot of ships there," said Isis Markarian, a representative from SA Commodities/Unimar at Brazil's biggest port, Santos, in Sao Paulo state.
She said ships arriving there now would manage to dock by the first or second week of May while ships at Paranagua may face waits extending as far as early June, depending on which terminal they are headed for.
Waiting times were improving at Santos with the soy harvest now having past its peak, but they were still longer than at Rio Grande, depending on the terminal, Markarian said, while Ships were now arriving at a slower pace than a few weeks ago.
Though the extra cargo is a boon for Rio Grande, the grains sector is desperate for investment in railways and ports and for the extension of a highway from the Center West grains belt to closer northern ports to clear logistics bottlenecks long term.
A new river port in the state of Para reachable by that north-bound highway will be one of the first new facilities to ease transport pressures, but it won't be ready until after next year's soy harvest, meaning another tough year lies ahead.
The government has sent a new regulatory framework governing ports to Congress which aims to make the sector more attractive to private investors and it announced late last week that government agencies at the ports would begin operating 24 hours a day, to help speed the flow of cargo.
(Reporting by Peter Murphy; Editing by Leslie Gevirtz) (( 61 3426 7025)(Reuters

Sunday, April 21, 2013

Agrishow 2013

With improvements in infrastructure, the next edition of Agrishow should be the best in 20 years
Over R$ 1.2 million was invested in exhibition areas, parking and access

Event will be held from April 29 to May 3

The Agrishow (International Fair of Agricultural Technology in Action) , consolidated as the main agribusiness fair in Latin America, will be held from April 29 to May 3, in Ribeirão Preto (SP), and provide infrastructure improvements in the area of 400,000 meters square.

Over R$ 1.2 million was invested in exhibition areas, parking and access. parking in visitors was increasing the number of collection booths, which will expedite the entry of vehicles and reduce queues. The internal transport visitors between the parking and the South Ordinance will be done with urban bus line, providing greater safety and comfort to visitors. There was also improvement in the coverage of the floors of the taxiways. Besides paving the floors of food courts, the visitor will have more varieties of options establishments with food per kilogram, a la carte restaurant, fast food, snack bars, steakhouses and ice cream.

 - The granting of the area for 30 years took legal uncertainty and is allowing us to implement investments to provide more comfort, flexibility and security to the visitor. Upon completing 20 years of history, Agrishow will have its biggest and best edition, says the president of the fair, Maurilio Biagi Filho. The fair is organized by the Brazilian Agribusiness Association (ABAG), the Brazilian Association of Machinery and Equipment ( Abimaq), National Association for the Promotion of Fertilizers (ANDA) and the Brazilian Rural Society (SRB).

Saturday, April 20, 2013

Kory activities the next 10 days

It has been a busy 10 days personally in Brazil, my son has been in hospital but is doing much better. It took 8 months to nail down his diagnoses but he is now on correct meds.
Everything takes time in Brazil. Brazil will teach you patience. Something I did not have the first 30 years of my life.

I have scheduled to meet with investor group from Connecticut Thursday this week.
They are looking at limestone investments in Mato Grosso.
I will give them an overview of Mato Grosso and macro potentials of Brazil

I am headed to Ribeirao Preto, Sao Paulo on Monday April 29th. It the big ag
show there. I look forward to visiting with friends and catching up on Brazil
ag trends and machinery sales.

I am working on May newsletter and will send that out to subscribers soon.
I will include 2014 cashflows for Mato Grosso soybeans. Costs keep going higher
and soy prices stable to in a slight downtrend.  The margins are not as robust
as previous two years.

I will update as I know more. Subscribers and VIP clients are always the
first to know.

Friday, April 19, 2013

Eike gets help from BNDES

funny how fast things can happen when they need to for a few special ones.

Others wait months for approvals or refusals.

Batista gets another lifeline – this time from BNDES

 Has Eike Batista’s “X” group of companies become too big to fail?
Judging by the amount of help that “Brazil Inc” has been throwing his way, one would be forgiven for thinking so. The latest to lend a helping hand? BNDES, Brazil’s development bank, which on Thursday approved a 10-year, R$935m ($464.6m) loan to Batista’s mining group, MMX Mineracao e Metalicos.
The loan – which is free of interest or principal payments for 12 months – will be used by MMX to extend “a significant portion of its short-term debt” and help complete an iron ore terminal on the outskirts of Rio de Janeiro, the company said.
The loan will no doubt give Batista and his beleaguered businesses some much needed breathing space. Shares of companies in his EBX group have been in freefall after his flagship oil company OGX started missing production targets last year.
With Batista’s listed companies reportedly owing as much as R$7bn ($3.5bn) in debt, his fledgling businesses’ continued failure to hit revenue and production targets have sparked concerns that the flamboyant billionaire might have finally stretched himself too far.
Concerns over Batista’s ability to keep the funding going for his oil, mining and port projects – all of which require a large amount of upfront working capital and do not generate immediate returns – prompted both Standard & Poor’s and Moody’s to slash their ratings on OGX this month.
The BNDES loan approval comes after BTG Pactual, the Latin American investment bank, reportedly extended him a $1bn credit line last month. The bank is run by fellow billionaire André Esteves, who has close ties to the federal government and state governor in Rio de Janeiro, both of which will have welcomed any move.
More relief could also be coming in the form of Petrobras. The state-controlled oil company is currently in talks with Batista about a potential tie-up. The oil major said earlier this month that it could consider leasing a berth in Açu Superport, the giant port that Batista’s LLX Logistica is currently building in the state of Rio de Janeiro. The port has reportedly been struggling to attract investors. So any deal with Petrobras would be greatly received by LLX.
It’s a similar story for MMX. The miner, which announced net loss of $400m in 2012 (compared to a $10m loss the year before), have seen its shares lost 80 per cent of their value over the past year.
Shares rallied on Thursday by 3.9 per cent on the BNDES deal.
Batista once called BNDES, “the best bank in the world”. With one estimate putting the amount that his companies have received from BNDES since 2005 at R$10bn, small wonder he’s singing the bank’s praises.

Monday, April 15, 2013

Brazil corn ethanol mill update

Corn ethanol mills catching on in Brazil

Farmers and ranchers in South Chapadão met, on Thursday (11), with Mayor Luiz Felipe Barreto and secretaries Ilton Henrichsen (Works), Altair Bevilacqua (Finance), Tiago Maia (Development and Environment) and Charles Sturmer (Deputy Secretary of Government) when the project was presented a U.S. group that the city intends to install an ethanol plant corn.

As this is unheard of in the country, two representatives of corporate executives Bio Urja Trading LLC and POET gave an explanation about what it is, how it works and the benefits of plant Eetanol, which will also be the first Bio Refinery in Brazil.

According to information from city hall, the production of corn ethanol is a reality in the United States as well as the ethanol is produced from sugar cane for Brazilians. Bio Urja Trading Group LLC and POET have 82 terminals of this type in the country and are responsible for 10% of the U.S. market for ethanol. In addition, the company exports the fuel to Japan, Australia and Africa.

During the meeting, the executives reported that interest in producing corn ethanol in Brazil is the result of a study that shows that by 2020 will require at least 20 more plants to keep the fuel supply of the Brazilian fleet.

Furthermore, the gas tends to be more costly in the next few years. The many distilleries installed on called Corn Belt - the U.S. corn belt - also reveal that the fuel tends to gain space. In addition to corn ethanol, the plant of this size produces the DDG, a byproduct that is added in this process and is used in animal feed because it contains high energy and protein.

Chapadão South was the city chosen for the project because of all the other State, "is bringing together everything that is needed: entrepreneurship, technology, good location, lots of acreage and livestock," said Marcos Machado, representative group.

The difference in plant corn in South Chapadão is that, in order to lower production costs, will be used as fuel for boilers Biomass calls: Brachiaria grass and straw. In the USA natural gas is used, which is still expensive in Brazil.


According to representatives of U.S. companies, the corn plant operates 350 days a year and uses this period about 340 thousand tons of grain.
The producers of South Chapadão showed up excited about the venture.
For the schedule of the group if the deal closes, the plant will start its activities in South Chapadão in early 2015, offering around 150 direct jobs and more than 500 indirect jobs. For that will be invested about 70 million dollars 4/14/13

Tuesday, April 9, 2013

wheat tariff reduced

DJ Brazil Cuts Cotton Tariff, Increases Wheat Import Quota
  SAO PAULO--Brazil's government said Tuesday it cut the tariff on imported
cotton fiber and doubled the quota of wheat that can be imported with no
tariff, both for limited time periods.
  Up to 80,000 tons of cotton fiber can be imported from May 1 through July 31
without paying a 10% tariff, the country's trade ministry said. The goal is to
ensure supplies for Brazil's textile industry before the cotton harvest starts
in June, according to the ministry.
  The amount of wheat that can be imported without paying a 10% tariff was
doubled to 2 million tons through July 31. The tariff was cut because of a
decline in the wheat harvest in Brazil's main supplier of the grain, Argentina.


In this video Eike predicts his net worth to be 80 billion by 2015.
In 2011 it was 30 billion.

Minute 00:12

In this article, the Brazilian govt is pondering a rescue
package for uncle Eike:,governo-discute-socorro-a-eike-batista,149900,0.htm

This is Brazil´s version of a billionaire rescue package.

My how things change!!!!!!!

so quickly !!!!!!!!!!!!!!!!!!!

The apocalypse of Brazilian agriculture

Amen !!!!!!!!!!!!!!

The apocalypse of Brazilian agriculture! - José Marinho Annes

Tuesday, April 9, 2013,


There has been a lot of time talking about that Brazil will be the world's breadbasket, which nourish thousands of people, our agriculture and our systems are examples for the planet. I agree in gender and grade, because I am a major proponent of our agriculture. We are examples yes, but inside the gate.

Last year many researchers said that we would have a bumper crop, we needed planning, infrastructure, logistics, roads, ports etc.. What happened to this alarm? Absolutely nothing! Amaze friends, NOTHING! Why is it? Particularly believe that agriculture for the Brazilian government is not on the agenda. We disclose important when the GDP numbers, but in time to strengthen the ministries and entities sisters - whose mission is to help the farmer, are simply ignored, or pretend that there are other priorities.

Unfortunately this is the apocalypse of agriculture, producers invest in technology, people to produce more, to earn more, but in fact, see their profits being torn in kilometric queues at ports or on trucks.

I feel helpless at this point: we fight, we communicate, but we are not heard, and heard, we say "stay quiet, everything will be solved," is the speech of those who are away from the field behind beautiful tables, with suits and ties well past that, unfortunately, has no compassion for the difficulties of those who help keep the country open doors.

When we talk to our friends in time of tax filing, we see that we work almost five months to pay our taxes, ie every $ 100 purchased, $ 25 will go to our government. I'm not against it, but would like to see them well applied to improve the situation of people and mainly rural family.

At some point I thought about creating a party and had support because, in this country, everything is political, one that unfortunately does not work. I am afraid that doing so would be going to an endless hole. But who knows to fight for our needs, the party suggested denomination as PPD (Produce, Preserve for those who have the gift) can not be an option. I sincerely hope that with all this we are living, the leaders of Brazil be sensitive and understand that we need to invest not to lose. Do not want to imagine a new apocalypse in 2014.

So, in the wise words of Mahatma Gandhi "in the great battles of life, the first step to victory is the desire to win." Wisely use our mistakes to win our space: being seen as a major agriculture on the planet.

By José Marinho Annes, Agronomist, Manager of Education National Association of Plant Protection - Andef

April Conab

Soy  81.94 mmt

Corn total  77.45 mmt (wow)

Details sent to subscribers

China and Nova Mutum ethanol

I doubt this will become reality.

If it does, it will be a small mill.

I think Lucas do Rio Verde large corn mill has
better chances.

Brazil - China's CHMC seeks farmers to back $20 mln corn to ethanol plant

Tuesday April 09 2013
China National Heavy Machinery Corp. (CHMC), the Beijing-based developer of industrial facilities and warehouses, is asking Brazilian farmers to invest BRL40 mln ($1 = BRL2.58) in a corn-ethanol plant that will help diversify their revenue. CHMC is seeking to start construction next year in Nova Mutum in Mato Grosso state, official sources said.
The proposed plant will process 400 tonnes of corn a day, which would translate into around 50 mln litres of ethanol a year.

Monday, April 8, 2013


Conab monthly report Tuesday morning.

I will send out highlight report to subscribers.

I will be going to Agrishow April 29th.

Weather remains ideal for 2nd crop corn
and sugarcane development for 2013.

Friday, April 5, 2013

Red River Valley net farm income

This past year was one for the record books. Northland Community and Technical College dean of management education Ron Dvergsten reviewed the 2012 Red River Valley farm business management records this morning in Crookston. Net farm income for farms in the Red River Valley averaged nearly $538,000 in 2012, an increase from $230,000 in 2011. Looking ahead, Dvergsten said the situation could be much different in 2013.

Impressive numbers for nothern plains.

Once in a lifetime lining up of the 7´s

Argentine corn to NE Brazil to aid drought relief

Looks like Brazil govt is going to purchase
Argentine corn and ship it to the NE of Brazil
where chronic drought continues.

There simply are not enough trucks to
be diverted from soybeans to haul
Brazil corn.

If they wait until June- it will be too
late for many herds.

Argentine corn is the least worst option
at the moment.

Old lady

Open Mic

Thursday, April 4, 2013

Dr. Simon Atkins

at about minute 35 he has 2013 forecast.

I remember his call for flooding in North Dakota
back in 2011.

Sure gonna be a cold wet bitch for northern plains.

I am not sure about radiation theory, but it is entertaining.

Brazil machinery sales

The sale of agricultural machinery in Brazil in March increased 18 percent over February and 38 percent over March 2012 to 7320 units, reported the National Association of Vehicle Manufacturers (Anfavea) on Thursday.

Just wait until Agrishow

Blow the barn doors off........

North Dakota wealth curse

Land prices in northern plains just keep surging........

Grain storage

According to Conab, there are now in operation in the country 176 public and private warehouses with a capacity to store up to 145 million tons of grain. This year 180 million to 185 million tons of grain should be produced, 14 million more than in the previous season.

In Brazil, only 15% of the crop is stored by the producer, a proportion that rises to 35% in Argentina, 65% in USA and 85% in Canada. This makes the producer more dependent on national public warehouses. On average, the storage capacity of the country is 80% under normal conditions falling well below the level recommended by FAO of 1.2 times the annual production.

Brazil meat consumption

The expectation is that domestic production of chicken passes from 13.2 million tons in the current crop of up to 23.7 million tons in ten years, which represents an increase of 79.2%. In the case of cattle, must pass 8.4 million tonnes to 13.6 million tonnes (61.5% increase), while the swine may increase from 3.3 million tonnes to 5.3 million tons (+56.2%).




More govt in Brazil- More govt

Wednesday, April 3, 2013

Doug Ferrel

I first met Doug Ferrel back in 2001.
I first visited the farm you see in the video.

Later in 2001 I flew up to Querincia where
he bought some more land.

He is a true Pioneer in Brazil ag.

I have enjoyed visiting him thru the years.

hat´s off to Doug,
it was not easy

video here

Lucas corn ethanol mill

Marino Franz was in Brasilia where he attended a meeting with the Minister of Agriculture and representatives of the National Association of Corn Producers to discuss the deployment of factories of ethanol from corn. "We're going to put it in the Investment Support Program - PSI - Central Bank a project to ethanol plants in the state of Mato Grosso , "he said.

I can not say that now we will begin construction this year or not, but I say that it is a real investment. 

Paradigm shift for Mato Grosso corn 2014 and beyond

Argentina flooding

From flooding to drought to back to flooding again:
tough to be Argentine these days

Brazil economy

Brazil econ article

Mato Grosso minimum corn price

With recent sell off in corn and the perfect growing weather
for 2nd crop corn in the Cerrado states, there is more and more
talk that farmers will use the minimum price option currently
set at R$ 13.00 per sac or about US$ 2.95/bushel.
With an average yield, this does not cover cost of production.
We need rains into early May to see this through.

Tuesday, April 2, 2013

Crop acres switch

Northern Minnesota farmers switching all those
corn seed bags to sunflower seed.

Looking like a May start to any field work
in the far north.


I just paid R$12.00 for a small package of bacon.
These are going to be expensive pancakes in
the morning with all things added together.
Bacon, Pancake mix and Maple syrup.

Rain prevented shipments of grain per 310 hours of Paranaguá in March

The rains paralyzed shipments of grain at the port of Paranaguá, one of the most important in the country, for a total of 310 hours over the month of March, the port authority said on Monday. The stoppage, which totaled almost 13 days in March, helped to reduce the volume of soybeans shipped by Brazil last month. Exports were 16.5 percent above March 2012, despite a large volume of soybeans coming to the terminals and a large international demand.

Government denies cancellation of contracts of soybeans

Brazilia  - The Secretary of Foreign Trade, Ministry of Development, Industry and Foreign Trade, Tatiana Prazeres, said today (1) that there was no cancellation of contracts for shipment of soybeans due to problems of transport . According to her, what occurs is a rescheduling of dates by producers.

March soybean exports

March Brazil soybean exports were 3.54 mmt.
960,000 tons in Feb.

Brazil needs to be up in the 5 mmt ton per month
area the next few months.

Monday, April 1, 2013


The next Conab report will be out April 9

I will send out highlights update to subscribers.