Monday, January 23, 2023

22 years in Brazil

22 Years in Brazil- I came from the end of the world. I come from a small town in Northwest, Minnesota. I come from a humble background of rocks, swamp, livestock and crops. Soybeans had just been introduced to my area when I was reading about the massive expansion in Brazil 25 years ago. My home area was heavily influenced by CRP(Conservation Reserve Program), crop insurance, government payments and obedience of wetland and sod buster laws. In essence, farmers were all government employees. No one dared to deviate from the scripted outlines of various farm programs of the 80s and 90s. I felt restricted, boxed in, and unable to break free from the self imposed bondage that, at the time, seemed completely normal. 


I had first visited southern Brazil and Argentina in 1993. At the time, I was more impressed with Argentina than Brazil.


My story’s beginning starts back in 2000. As I look back at all of the new friends, colleagues, confidants, and mentors that appeared over 20 years, one starts to believe in the phrase: “When the student is ready, the teacher will appear.”  If it were not for several new friends and mentors that appeared at the correct time over many years, I simply would not have made it in Brazil. The culture, economy, foreign exchange, and language barrier would have eaten me alive. 


Brazil is not for beginners. I was a beginner. I knew I needed to check my Ego at customs. I am a guest in Brazil. It is not up to me to change Brazil. It was up to me to adapt to Brazil and jeitinho brasileiro”, Brazilian way” refers to the improvised and often informal approach with which Brazilians resolve problematic situations. This Brazilian way of being is seen as both negative and positive, depending on the situation in which it is applied.


For a foreigner, I do not think this can be taught. One needs a moral compass in life. However, one needs to be able to turn it on and off. I was able to do that. I think most “gringos” tend to come with a fixed set of ideals and business models, and more often than not, they do not mix well. Think of oil and water. They are both in same cup, but each are at the extreme ends of the cup. One almost needs to think of yourself as biodiesel in Brazil. 5% bio is a bit light. 10% is about right and 15% is maybe too much? I use this analogy as a way to describe how deep you are allowed to enter the Brazilian culture. As a foreigner, you are welcome, but you are never 100% part of the family. If you are an insecure person, this can lead to tension, resentment, and depression. I think in order to survive Brazil, one needs to know who you are first. There are so many diversions in the country that without a stable compass, one will lose focus and lose sight of your Magnetic North Pole- so to speak. 


I was able to find solace with my wife and son. My son and his education in Brazil was the foundation for me to put my head down and keep plowing forward. Were there times I wanted to give up? Yes. It would have been easier to walk away than continue in Brazil. There were several times in business negotiations, health issues with my son, and dealing with trying to get paid in Brazil that made me wonder: “What the hell am I doing here?” 


Given that my son is now at Notre Dame University in USA studying to be a Doctor, the heartache and frustration was all worth it in the end. But, when you are in the shit, it is very very hard to see how this will all work out. 


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I got started farming in Minnesota clearing land and breaking up CRP from those who went broke in the 80s investing in trees, rocks and swamp in my home area during the previous ag boom in USA. I was a teenager and I was able to step in and clean up their messes. In the late 90’s, I was reading about the Brazil expansion and wanted to understand this better. Could I do in Brazil what I did in Minnesota on a small scale? 



Feb 2000


CASEIH had invited a few of their VIP clients for a tour of their combine and tractor plants in Illinois and Wisconsin. While on the plane, I was seated next to a South Dakota farmer who had just gotten back from Brazil. Needless to say, I was full of questions. I asked him who he went with? He said Dan Mahoney from Morris, MN. 


June 2000


I drive down to meet Dan. We were like two peas in a pod. We saw the world the same way. Dan’s Brazilian tour partner in Brazil was making his first trip to Mato Grosso in August. He made a video tape of their tour into the frontier of Mato Grosso. Today, soybean ground zero on the planet. 

When I saw this video of new land, trees on fire and massive expansion, I knew I needed to see this. 

I need to thank Dan for his countless hours of answering my novice questions about Brazil and his time interpreting for me on the phone after I met Maria some time later. 


January 2001


My cousin Mark and I join a dynamic group from USA on a tour of Mato Grosso. We were blown away at what we saw at the time. Soybeans are US$ 5 per bushel and these crazy bastards are clearing sections and townships of land to produce more. Meanwhile, in the USA, we were CRPing and Pre-vent planting to take land out of production because everything was unprofitable. How could these two world’s exist at the same time? 


I returned to Mato Grosso two more times in 2001. I was always a day late and a dollar short to do any deals. Land prices were doubling every few months.


From 2002 to 2005 is what I call my incubation period in Brazil. I really did not have any plan. I knew I wanted and needed to be in Brazil. I was not sure how this was going to work. 


I had met my future wife Maria in August 2001. With Dan’s help, we kept in touch. I would go down and visit her. I asked if she would like to help in Mato Grosso? She said yes and she was already packed and ready to go. She literally became my Brazilian Sacajawea. She had no fear and was able to help me travel through Indian reservations and deal with local realtors etc. At the end of one my trips, we were at Flamboyant shopping in Goiania. I gave her R$ 100 to go shopping. I sat on the mall bench and waited. After a period of time, she came back with presents for my family in Minnesota. She did not buy a damn thing for herself. I told myself- this one is different. In 2003, my son David was born. Needless to say, the best part of my life. 


2003-2005 


This was a stressful time. I had established myself in Goiania. I was now a father. I was in the deep end of the pool- sink or swim. My Portuguese was still limited. I could function, but by no means fluent. I think it took three years for me to become “Brazilian”. I became fluent enough in Portuguese to argue with my wife and, after she smoldered for a while, she would agree that I was correct with my argument. By this time I was doing a few tours in Mato Grosso and spending more time with locals at birthday parties, bars, parties and various get togethers. I remember one time talking to a group of truckers at a truck stop. I was telling them about my food poisoning adventure after eating a pastel at a bus station in Nova Mutum. I puked and shit for two days. I was able to tell this story in Portuguese and animate it. I had the truckers rolling on the ground and laughing tears. I told myself then, goddamn Kory, you maybe gonna be ok here? 


I was the land guy for a new start up company in Cuiaba being funded by Americans that I got to know on my first trip to Mato Grosso. I got to know many people and this gave me some credibility. After a period of time, we each went our separate ways. It was late 2005 and I was now unemployed, feeling very alone, and pondering what the future would hold for this lost Viking from Minnesota. This was probably the scariest time for me. 2006 was a tough year. I did not have much money and I considered packing up and going home. This is just too difficult. 


During this time, I had hooked up with another American expat in Goiania. Gene Whitmer became an invaluable sounding board and mentor along the way. If it were not for him at this time, I would not have made it in Brazil. Gene was a Brazil Peace Corp vet from the 60s. He had vast practical knowledge of Brazil. The good and the bad. He knew nothing about soybeans, but he had a website with a powerful Google ranking. Keep in mind this is all before the advent of social media. We would get together regularly for drinking sessions. These drinking sessions and my ability to go to Goiania shopping and watch a new movie in English were of great importance as to me being able to keep my sanity in Brazil. 


Gene was impressed with my knowledge of ag and what is going in Brazil. He suggested I start a blog?

What is a blog in 2005? Since his business of helping Brazil students learn English and study abroad was in decline, he was able to spend a lot of time setting up my current site of www.Brazilintl.com. This was all started as an experiment. This might not work. I threw my lasso around the website and never looked back. Swim Gringo Swim !!!!!!


I started to publish a newsletter and doing Mato Grosso tours for those interested. I was contacted by hedge funds, journalists, students, and curious travelers from around the world. The website allowed me to be found. From 2007 to 2012 was a blur. I was traveling all the time and sending out reports. I remember February of 2011. I was to Cuiaba three times. Three multi-billion dollar hedge fund tours back to back. I had arrived. I knew who I was now. 


By 2011 and 2012 a new client had popped up as a referral from another client that was getting my newsletter. Summit Ag had reached out for a tour and I showed them around and suggested they meet friends of mine in Lucas do Rio Verde, MT. I had met Paulo Franz on my first trip to Mato Grosso. He and his brother showed interest in corn ethanol production, but they needed capital and know how. 

Summit Ag was the perfect fit for a real estate deal and pivot into corn ethanol and Stine seed sales. 

From me saying yes to a tour and picking up the phone on a Sunday during a heated land deal negotiation has lead to circa US$ 750 million being invested in Mato Grosso. 


I have not gotten rich in Brazil. I have never screwed anyone one over in Brazil. I was in the right place at the right time to be of service. I do not think my story can be replicated today. It has taken 20 years, but I feel like all of the suffering, sacrifice, and due diligence was all worth it. Indirectly, I was able to contribute to Brazil and Mato Grossso. I have no idea of how many jobs that have been created. From a small idea of a website, blog and being willing to educate and introduce investors to dynamic Brazilian friends and contacts has made it all worth while. One of those tours that I did for a Mutual fund from New York back in Feb 2011 reached out to me in late 2022 for service in the fertilizer sector. That fund manager had moved on, but he remembered me and my tour and told his analyst to contact Kory- he will get you on the correct path. Eleven years after doing the first tour, it is still paying dividends. 


Social media has taken away the need for on the ground tours these days. However, one thing that has not gone away is the need for honest, accurate, real time advice on what is happening in Brazil. The ability to separate the noise from the what really matters. Recent political rhetoric is the prefect example. 


At this time, I would like to add that all the friendships, relationships, confidants, and yes all the parties, so so many parties, are worth more than all the Gold in the world. I think we all wonder if we can be “loved”, “liked”, “respected”, or “be of value” outside the small communities we grew up in. The answer is Yes. If you are humble, honest, diligent, and willing to self deprecate oneself by telling jokes, I think the world is full of friends willing to let you into their world. For that privilege, I am grateful. In other words- don’t be an asshole. 


I would like to thank the Zanni family for the confidence and letting me into their 60 year story. 

Ed bought 170,000 ha+ back in the 1960’s in central Mato Grosso. He was 40 years ahead of his time. He bought soybean ground zero before any soybeans were even thought of. His land was stolen from his family in the 80s and 90’s as the soybean wave came. 


They have been fighting to get their land back and or make deals to resolve the problem. I again jumped into the deep end of the pool. Sink, swim or die Gringo. I was in land mediation with Judges, aggressive lawyers, and local farmers fearful of losing their land. That was so intense, so emotional, and also the fear for my life was also a factor. This story is still playing out and it would make a captivating film. The story is full of betrayal, theft, intrigue, deception, subterfuge, death, and of course a billion dollars worth of land. 

I am grateful for being allowed to part take in this story. I was able to advise them to do this and not that.

It took years of experience to get there, but this again comes back to the beginning. If it was not for the mentoring of Gene Whitmer(web master), I could have easily fallen into the BR trap of riches, fame and land wealth by being greedy. It was so difficult to operate for years behind the scenes, but by doing so, it kept me alive. 


I was asked by an USA investor to check on his investment in Sao Paulo. He had a small factory and his Brazil partner was making roll tarps for trucks. He was wondering where all the money was going? I was able to pop in and find out that the BR partner had been selling inventory to a local scrap yard. He would get rid of inventory for pennies on the dollar for cash in his pocket. I later found that when the USA investor had come down for a visit and it was a Brazil holiday. The Gringo was not aware of this. The BR partner had hired local actors to pretend to be assembling tarps during the holiday as the real workers were at home. But, to keep the money coming and look busy, he had hired actors to manufacture items that would be taken to junk yard the next day for cash. It is paramount that any foreign investor live in Brazil, stand in line, kick the soccer ball around, and go to many many birthday parties in Brazil before you invest here. You must understand this cultural prerequisite first. 


I remember on one of my investor tours, I had retired to my hotel room for the evening. I heard a knock on my door and it was a young girl. She was sent to me as a present by a local. I was being watched. I have been followed by Mato Grosso realtors. Everyone wants a piece of the action. One must always give tips in Brazil. Sometimes in advance. When one parks your car at various locals, there is always a kid or someone with eyes watching the hood. You always give guys like this R$5. They are your eyes and ears. They are your car insurance. If it bothers you to give someone money for doing nothing, you cannot live in Brazil. One needs friends wherever you can find them. You need to pay. Even if this friend only last’s an hour. They are on your side for that hour and that can save your life or open the door to a new opportunity you had not thought of. 


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I would like to thank my son’s schools in Goiania. Casa das Letras for my son’s Elementary education and Colego Einstein for high school. The education my son received at these private school’s were invaluable to get him to where he is today. From a very young age, I was teaching my son English. I would take him to the bus each morning and we would repeat the following. The sky is blue. The flower is purple. The grass is green. The car is black. The bird is yellow. The moto is fast. I must have repeated those phrases 10,000 times. David also said those phrases 10,000 times. On Saturday’s or Sunday’s, we would watch the medical TV show “House”.

The show was in English with Portuguese subtext. My son would listen and read at same time. He would see all of those advanced medical phrases and then ask questions about them. He would go to his iPad at the time and look up more info about these rare diseases and read about them in Portuguese. 


In 2013, my son became very sick. It took many trips to hospitals and various medical opinions. He had an auto immune disorder that affected his large intestine. We were literally killing our child with antibiotics and warm milk and cheese. Once we got on correct track, it was 14 months of prednisone. This stabilized him, but he became swollen and affected his development in his adolescent years. He went to school wearing a mask. Kids would ask if had cancer. He became more introverted and wanted to understand why this is happening. He did not like Brazil hospitals. We made a trip to USA in 2014 and got a 2nd opinion in St. Paul, MN. The Indian doctor told us to stop this prednisone immediately. All he needs is a whole foods anti-inflammatory diet and he will be fine. It was a difficult two years from beginning to end. I think this experience shocked my son into the medial field. He wrote college essays saying, that once he becomes a doctor,  he will dedicate his life to helping kids to not suffer when they are ill. 


The pandemic came and my son graduated high school while laying on a couch. It was very anti-climatic for him. I told him to shoot the moon on his USA college applications. Let us try and turn all of this into lemonade. 


He was accepted to Notre Dame in Indiana, USA. He is a Biology major with a 3.8 GPA in USA. He is on a pre-med track. My son is planning to go to Copenhagen, Denmark this fall in a medical shadow program at an elite hospital there. It has a 1% acceptance rate. He has been accepted for fall semester 2023. Needless to say, his mother and I have tears of joy for him. He also has found his place on this Earth. He found his Povo. 


This story is not done. From a small website, will power, dedication, and putting good people in touch with other good people has made this all worth while. I am welcome at many houses in Mato Grosso and Brazil at any time. If I need a vehicle, airplane, or a favor, it is there. To me, that is priceless in this crazy world we live in. I, of course, had all of that in Minnesota. Surrounded by family, cousins, and neighbors all willing to to bend over backwards to help in a time of need. It took 20 years, but I can say I have that also in Brazil these days. I have friends, neighbors, and contacts that actually care about how we are doing. 


I would love to hear some feedback from readers.

Drop me a note if you liked this story or hated it.


Let us see where the next 20 years takes us 


Kory


agturbobrazil@yahoo.com

2 comments:

  1. This is a very interesting story Mr. Melby. I'm very happy to hear about the success of your son as well as your experience in Ag business here in Brazil.
    I just moved to Brazil with my wife (brasileira) in 2021. It's been a rollercoaster to say the least. We both work in Ag as well and I'm learning some of the same lessons you speak of in you post.
    I couldn't be happier to see her here with her family and to start to be accepted into this culture. I do still feel like an outsider at times but, when I have moments of fluency, like you mention joking with the truck drivers, I feel like I can make it here. I'm not quite at that level yet, but I am starting to hold my own in conversations.
    Your story gives me hope!
    Thank you for sharing and for being so open.
    Abra├žos!
    Charles

    ReplyDelete