Friday, February 24, 2017

Feb 24 blog crop size, rains and Carnival

It now looks like the Brazil soy crop is at least 104/105 mmt.

What looked like the ceiling is now a floor.

Rain makes grain.

I do feel that the numbers coming out this week above 107 mmt
and talk of a 110 mmt are getting close to irrational exhuberance.

The NE and RGDS benefitted much from the recent rains.

I still must caution that planted area of soy could be a late
season surprise that could pull the final production tally down a bit.

We are working with a + 500,000 ha YoY increase in planted area.
That may very well be true.

But, depending on the final tally of 1st crop corn production and
planted area, we could drop soy area down a tad.

Also, Parana, MGDS, Goias, MT, MG, and SP all have a ban on 2nd crop
planted area of soybeans. In years past, this has been as much as 400,000 ha
nationally. This has helped push the production higher.
RGDS still has 2nd crop soy as it is planted after wheat.
But, it still is only the one crop of soy per year. It just gets planted
into January and acts like a 2nd crop.

Whatever the final tally, Brazil has record soy crop hands down.

Increased fertilizer usage, more use of Intacta genetics, and precision
ag combined with normal to even above normal rainfall helped Brazil
rebound from last year´s set back.

Mato Grosso has a phenomenal soy crop. Recent rainy weather has caused some
losses to accrue. A few hundred thousand tons have been been lost due to seed burn,
mold, and sprouting issues. I am not sure if we subtract from 31 mmt or maybe at one time
32 mmt. 9.3 M ha X 3.5 tons/ha =  32 mmt+.
It seems like everyone had at least 60 sacs per ha soy.

Transport is the big issue. Mud - mud and more mud. Beans are trying to go north
but hundreds of trucks are stranded in Para state. It was forecast that 9 million tons
could have been shipped north to Amazon this year for both soy and corn.
With conditions like this and a return to normal rainfall patterns, this is now in question.

The plus side of the drought last year was cheap freight and good road conditions.
Today we have the flip side.

This means more grain will likely be routed to Santos and Paranagua.

Carnival the next few days in Brazil. In March, Brazil will come back to life.

We have talk of opening up BR land to foreigners again. Let us see what the details
will be. I have been waiting for this day since August 2010. This is when they slammed
the brakes on foreign investment and the start of Brazil´s demise into political and economic
no man´s land. It is time for a new cycle to begin.

If the government would not have interrupted things back in 2010, we would not
be dealing with the logistical questions yet today as per roads and railroads.
(At least to a lesser extent than we see today)

The global powers are trying to find out a workable solution to the new world
we find ourselves in. China cannot get caught with her pants off as per protein needs
over the next decade. Brazil does not want to give up national sovereignty to other
country´s that want to suck her dry and call her dusty. Meanwhile, USA is pounding
the nationalistic drum so the whole world can hear it. Listen to ME !!!!!!

Bottom line to all of this is that China is working on a 50 year plan.
USA is looking 3 to 6 months ahead.
Brazil does not have plan.

How do we get these three capital and food producing powerhouses on the
same page so none of them feel taken advantage of?

China wants to help with BR infrastructure. Let them.
Let BR farmers produce the grain that they do so well.
Let China help ship it via rail and port systems.
Let USA supply cheap capital and precision ag products so we can
produce more with less area and, in theory, it will be a win win win for
everyone and the environment also.

Happy Carnival


Sunday, February 5, 2017

1st Successful Farming Brazil issue in Portuguese

I picked up the new Successful Farming magazine in Brazil this past week. It is in Portuguese.

It has the same layout as to what we are accustomed to in USA.

Articles on who produces the most soy per hectare, who has the best cow, articles on bug control, ethanol, and drones. A heavy focus on technology. An article on Mato Grosso fish farming and another from Minnesota regarding uniform shit spreading as the key to good yields.

Several images of Donald Trump and also an article on chicken farming.

Bigger, better, faster, more efficient are the themes.

These are "Gringo" fabrications. In Brazil, sometimes these business
models do not apply well.
Much of the Brazilian ag sector is very 21st century. However there are areas that lag behind,
and are not into "high productivity."
Many are in survival mode, but do it on a grand scale so they can get by with that model.

One thing the Brazil farmer does well is efficiency. He knows how to get things done with the least amount of investment possible. When interest rates are 10-12-18%/ year or more, one does not add bells and whistles to a combine or tractor just because the neighbor has it on his.
The new add on must pay for itself.

I enjoyed the new corn ethanol article for Mato Grosso. The data in the article is not new news per sey. It has been well known about for one year in Brazil.

I live in electronic/digital world. The only time I even consider picking up a magazine in Brazil is when I pass through the airport. The number of news stands continue to decline in this recession.
A few major park areas in the city have news stands and in shopping malls are about it.

The modern/dynamic Brazilian farmer does not live on his farm in Brazil. He lives in the city.
The manager and workers are at the farm. The modern Brazilian farmer is well connected via several smart phones and in some cases video links to the farm to keep tabs on everyone. Well organized mega farms know what all employees are doing at all times and even have the plan for tommorrow mapped out.

I remember back to the 80´s when I looked forward to walking to the mailbox and getting the newest ag magazine to read through. It was our connection to the world.
By the time the 2000´s came, we wished they would stop sending all this crap. It was 80% advertisements.

Today, why do we even need print media?

A Brazilian farmer does not walk to his mailbox to get the mail like a farmer from the midwest
USA might do each day. It is a different market- a different way of doing things here.

The modern dynamic BR farmer is not easily accessable unless you have his WhatsÁPP number.

Those smaller subsistence family farmers in Brazil are so damn stuck in their ways for the last 60 years, you cannot pay them to change. They take what the land gives them. They refuse to pay for anything. And in some cases, even if you could get them to look at modernizing something, their local church might consider it evil and prohibit the family from doing it !!!!!
I have family members that I have brought Disney clothes and toys from Orlando for the kids.
The church prohibits them from wearing it !!!!

I would imagine driving a new John Deere would be the same !!!???

It is a mindset and a cultural thing that is difficult to explain until you witness and see it first hand.

Brazil is a difficult market for newcomers to the ag market to understand. You don´t just drive into someone´s yard trying to sell something. It is best to make an appointment ahead of time. And even if you did find interest at a given farm site, the person you encountered does not have authority to make a decision.

The dynamic farmer does his own research on technology and efficiency. When he decides to move forward, he jumps on a plane to Germany or USA and buys the technology direct. He does not wait to read about it in a magazine. More often than not, the journalists come to him to learn what he is doing -often 10-20 years ahead of everyone else.

I hope Successful Farming can find their nitch. It might work in RGDS, Parana, and parts of SP.
But out here in Goias,Bahia, Mato Grosso, it will be something found at the dentist office from time to time. The go getters do not have time for it, and those more laid back, will be afraid to touch the magazine and they will never buy it unless it is given to them. The only reason the dentist has it is because he passed through the airport while he flew out to the farm for the weekend and saw the magazine !!!