Tesla and the Eucalyptus Tree

Back in 2001, on my first adventure to Mato Grosso, it was suggested I read "The Lexus and the Olive Tree" by Thomas Friedman. At the time, it seemed so profound. It inferred that once a country had a McDonalds, it was now part of the new global order. The country had joined "the club" so to speak and would not go back. There are those that would drive around in a new Lexus while others would harvest olives as though they were in Biblical times. 

Twenty-five years later, I ask myself is this still true? Is there a new analogy that fits the world we live in? It seems like "Tesla" is the appropriate car to chose for our time, but what should the plant be? I asked myself. Soybeans came to mind after recent trade negotiations with China seem to have ended on a positive note. Soybeans seem to have been the pawn in a much bigger game. I then thought of the Eucalyptus tree and how central it is for energy in the processing of soybeans and corn in Mato Grosso. The Eucalyptus tree is a fast growing, renewable energy source, that allows the interior of Brazil to fuel the boilers by heating the water to process vast amount of soybean meal, soy oil, corn ethanol, and DDG's which are used to feed and fuel the world. Soybeans and it's sub-products are quite literally the "grease" that keeps the world moving. From tariff negotiations to the making of bio-diesel, soybeans are the synthetic lube that keeps everything friction free. Now that Brazil produces 150% more soybeans than the USA, it seemed appropriate to include this plant in the equation. 

Over the weekend, I listened to the Joe Rogan podcast with Elon Musk. I heard Elon predict, that in five years, we will not have "Cell Phones" per se, but a device that connects directly with AI. AI will do everything. Work will be optional, he says. Huh? I can hear my grandfather say, "The world has gone to hell". I can hear my grandmother say, "work until the sweat runs off your brow". Elon says, the only way the USA and the world can deal with our debt problem is through growth. The only way we can increase productivity is through the use of robots and automation. Throughout 2025, it seems like I have seen more and more John Deere tractors plant autonomously. I have also seen Horsch planters work without operators. I have heard comments from those that have traveled to California about the quantity of self driving cars on the road. 

Elon predictions:

• AI + robots will handle every task and every job. • Humanity won’t “work” the way we know it. Labor becomes optional. • People will earn a universal high income without needing a career. • 80% of goods and services will still exist — but humans won’t be the ones producing them. • Life turns into hobbies, creativity, gardening, family time, not 9-to-5 survival. • A world where comfort is guaranteed… not earned.

Elon continues to say, that in the coming months, Tesla will unveil and new high tech car that will blow everyone's mind. It is possible that it is an electric flying car. Meanwhile, the drone wars continue between Ukraine and Russia. Ukraine has been targeting Russia's energy production facilities and causing much pain. 

Throughout history, war has been about resources. It has been about land, food, oil, and expanding one's empire. We have witnessed Trump and others at least attempt to bring an end to the Israel/Palestine conflict that has been going on for thousands of years- the Olive Tree. It has been 3.5 years of Russia and Ukraine trying destroy one another with millions of lives lost. When I see images of Eastern Ukraine, I think of home along the Canadian border called "Juneberry". It is a godforsaken place that is swampy and full of peat ground. The only thing it is good for is deer hunting.  D-8 caterpillars have been known to get stuck and sink away never to be found again. I ask myself, why would anyone die for Juneberry? You can have it. 

If Elon is correct, Russia and Ukraine are bombing themselves into irrelevance. They will have no place in the new world he suggests. They have wasted so many resources such as education, souls, youth, and more importantly time. I think we all can see how fast the world is moving that countries, caught up in war, will never catch up. Information and data are the new land, oil and food. I say food because once the war is over, it will be John Deere, Horsch, et al that will bring the new technology to the fertile plains of the Ukraine and the robots will feed world. With the vast flat fields of Mato Grosso and Bahia, this is where all the technology and automation will be deployed. John Deere's See and Spray is fantastic, but what will be even better is the application of autonomous ground sprayers that can apply biologicals during the night at ideal humidity and temperatures, which will further enhance yields and lessen the need for herbicides, fungicides, and insecticides. 

So as Elon launches his new electric flying car and deploys more satellites so we all can be connected at anytime and at any place on the planet, I will be looking out for the robots producing the food in Mato Grosso. Work optional..... This will go against the Gaucho work ethic that is synonymous with my grandparents. 

This past week Nvidia reached a market cap of US$ 5 trillion. The total value of the USA soybean crop in 2024 was US$ 52 billion. 1% of Nvidia market cap. I repeat 1%. I think all of us in agriculture need to really let that sink in just how irrelevant we are in the whole scheme of things. Back in the 1930's, it is said that 21% of the population was involved in ag. Today, they say it is less than 2%. With automation, I would think that can drop even lower. I am not happy about this, but I am simply adapting to the environment we live in. I do not want to become a dinosaur quite yet, but they way some people behave on the planet, they are rapidly on their way to extinction or, at the very least, irrelevance. 

As long as soybeans can be a pawn in this larger game, we probably should feel fortunate that at least it is one ag commodity that can bring world leaders to "Heel". Good boy. However, without Eucalyptus or a similar biomass, it would be quite difficult to keep the soybean boom going in Brazil. This is because of the lack of natural gas which seems to squirt out everywhere in the northern hemisphere. 

It is forecast that by 2034, corn ethanol will be 50% of the Brazilian ethanol matrix. This was almost 0% in 2017. Corn ethanol will compete head to head with Sugarcane which has dominated the Brazilian culture since the 1500's. 

Sugarcane ethanol production started in Brazil in the 

late 1920s and early 1930s, with the Proálcool program in the 1970s significantly boosting production in response to oil crises. While initial use was sporadic, the government program established sugarcane ethanol as a major fuel, making Brazil a world leader in its production and use. 

In closing, while others in the world focus on killing one another for worthless land, I will continue to monitor how AI, automation, carbon negative ethanol, and technology will transform valuable land albeit in the USA or Brazil. I am happy to a part of the 1%, but it is going to more and more difficult to remain relevant in this shrinking market share we live in. 

The Lexus and the Olive Tree are dead. We live in a Nvidia/Tesla/AI/automation world and if Elon is correct, in FIVE years, we won't recognize today. Part of me hopes he is wrong. My anxious self worries about if he is correct......

Kory

Link to podcast:

https://www.youtube.com/watch?v=O4wBUysNe2k

What does Brazil Potash need to do to invest US$2.5 billion and produce fertilizers in the Amazon?

For those of you asking how to play Brazil without direct investment, this stock is

a thumbs up from me, but keep in mind, I have done zero due diligence.

Just some consults on the fertilizer trends.

Many want to own SLC, Adecoagro or Brasil Agro. Those are all valid,

but they subject to the ag cycle, weather, and currency markets. 

If Peter Zeihan is correct, ;>), and Brazil will not produce in the future due to

lack of resources, this stock should be priceless in time.

This is not a short term trade- it is more of a 5-10 year play, but

you would be in at the bottom, and a nice "liquid" way to play the

Brazil ag boom- that has already happened and they need the fertilizer

forever. 

That is the great conundrum of Brazil pioneers. It attracts the entrepreneur, 

the visionary, but due to the amount of capital and the time it takes to 

implement a new project, the first try tends to fail or the ram rod tends to

die before the project gets going. Thus, it is the 2nd generation that flourishes

from the vision of the original pioneer.

Mastery of the Language and cultural finesse are paramount. 

One needs to think of Brazil in 30 year blocks of time.

In the first 7-14 years, one tends to get whipsawed to death until

they find their sea legs and adapt to local cultures and economic/political

vicissitudes. 

These projects are winners. It will depend on who is still alive to reap

the benefits albeit in 5 years or 30??

Kory

** If I were 25-30 years old in the States/Europe, I would be "all in" on these stocks.

If I were 60, I would say fuck it. Enjoy Brazil, do not invest in it. It is the 60 year olds that

have the capital to invest in Brazil, but if one invests at the wrong time, it tends to be

about 14 years before one can work his way out of the problem. Time tends not to

be on your side at 60+. 

We have seen these types of boom/busts in the sugarcane, oil, and ag sectors over the

past 50 years. 

https://agfeed.com.br/negocios/o-que-falta-para-a-brazil-potash-investir-us-25-bi-e-produzir-fertilizantes-na-amazonia/

What does Brazil Potash need to do to invest US$2.5 billion and produce fertilizers in the Amazon?

In an exclusive interview with AgFeed, Adriano Espeschit, president of Potássio do Brasil, a subsidiary of the company listed in New York, talks about recent contracts to advance the Autazes project and considers a future dual listing on the Brazilian stock exchange

 11/04/2025

Projection of what the future Brazil Potash mine in Audazes (AM) will look like

In the fertilizer market, everyone knows that Brazil is highly dependent on imports of raw materials. And when it comes to a specific nutrient, potassium, the share that comes from abroad is more worrying: 95% of imports.

To produce more within Brazil, the starting point is to have deposits to explore, something that was discovered in the 1970s. When Petrobras was researching oil and gas in the Amazon basin, it identified potassium mines in the region.

Mining engineer Adriano Espeschit followed the story closely, worked in different companies in the sector and was on the project that tried to buy two assets in the region from Petrobras, but without success.

It was then that Canadian businessman Stan Bharti, born in India, decided to invest in potassium exploration in the area, starting “from scratch,” as Espeschit told AgFeed.

Today he is the president of Potássio do Brasil, a subsidiary of Brazil Potash, a company

officially created in 2009, its shares have been traded on the New York Stock Exchange since November of last year.

“The ore is 800, a thousand meters deep and you have to go there to confirm that. So, just to drill a thousand-meter-deep exploration hole, you spend around 2 million dollars. We drilled 60, so 120 million dollars have already been invested just in drilling the wells,” said Adriano.

Of the 60 wells, 43 were in Autazes, a municipality in Amazonas, where Brazil Potash's main project is currently being developed.

In recent years, there have been several battles to make the project a reality. The company says that US$250 million has already been invested. The total project, however, foresees investments of more than US$2.5 billion.

According to the executive, the expenses were for engineering, land acquisition, environmental licensing and legal issues.

The biggest challenge was facing questions from NGOs and the Public Prosecutor's Office about environmental and social impacts. The argument was that the project would be in an indigenous area.

After many court cases, with the support of the federal government and a position taken by Ibama itself, it was understood that the state agency, IPAAM, the Amazonas Environmental Protection Institute, would be responsible for granting the license. The authorizations have already been granted, according to Potássio do Brasil.

“The claim is so bad that, if it were on indigenous lands, it would have to have authorization or regulation from the National Congress in accordance with the 1988 Constitution. In terms of the State, IBAMA and IPAAM, which are the two environmental agencies involved, it was clear that it was not on indigenous land, so it was state land,” he stated.

In January 2025, Potássio do Brasil signed a Preliminary Cooperation Agreement with the Mura Indigenous Council (CIM) of Autazes. The agreement establishes an initial framework for collaboration between the project and the Mura indigenous communities, including a sustainable development program, as well as investments in social and cultural initiatives for the villages.

In May 2024, the Federal Public Prosecutor's Office filed a lawsuit to suspend the licensing of the potassium mine, arguing that the prior consultation with the Mura was not carried out properly and that the licensing should be conducted by IBAMA, which ended up not happening.

Espeschit says that he holds regular meetings with the community and that, when the project was approved, 32 of the 34 villages were present, reaching 90% approval, but the debate still generates controversy among the entities that oppose the exploration of the mine.

Now, the company says it has passed the preliminary licensing stage, and has therefore begun the installation of the project. “We are already starting the work to be able to install the mine, the plant, the road and the port”. AgFeed has learned that the details of the contract, which has already been signed, with the partner who will carry out the work to remove all the animals from the land should be released in the next few days. With the green light for the removal of the fauna and the suppression of vegetation, the company is moving forward with the excavation and installation phase of two deep wells on the site. “We will soon announce some contract signings with service providers who will be installing machinery there in the field, with their feet on the ground”, he says. The company that has just been hired has 10 employees on site, which, at the beginning, adds up to around 50 people. “During the work, we will have an average of 2,600 employees working there and will reach a peak of 4,000”, he estimates. The Autazes project foresees the production of 2.2 million tons of potassium. The shareholders have already indicated that, in the future, there may be a “second phase”, of expansion to other locations, which would lead to a volume of 5 million tons.

The start of production is scheduled for 2029 or 2030. This year “is more of a preparation year” according to Espeschit, when “the ship’s maneuvers” are being carried out. For 2026, he foresees full capacity in terms of implementation, when there will already be 2.6 thousand employees on the project.

Brazil currently consumes around 14 million tons of potassium. The product is imported mainly from Canada, Russia, Belarus, Germany and Israel.

“Excluding the 2.2 million tons that we will produce made in Brazil, we will reduce this dependence to around 80%”, he states.

If new projects are implemented in the areas already mapped, compatible with Autazes, it would be possible to reduce imports to 40%. “The National Fertilizer Plan (led by the government) sets a target for 2050, a reduction to 50%”, he says.

The company guarantees that it will be able to offer potassium at very competitive prices. “Our cost delivered to Mato Grosso is lower than just the logistics cost to bring it from Canada to Brazil”. Furthermore, the much faster delivery of fertilizer to rural producers is considered a differential. “They will no longer have to make a purchase more than 100 days in advance, which is the average time it takes when they place a purchase order to receive potassium on their farm.” At Potássio do Brasil, it would be possible to receive it “in 5 days or less,” he promises. The company would also benefit from less interference from exchange rate fluctuations, which tend to be important in price formation since almost all potassium is imported. Current challenges When asked about the factors that could still “hold back” the project’s progress, the president of Potássio do Brasil said that they are physical and financial issues. In other words, it is necessary to have qualified people to work on site and also have resources that make implementation viable. In any case, he guarantees that exploring and producing potassium in the Amazon is now a real thing and will happen. Until a few years ago, some analysts considered this possibility a “utopia” due to the strong resistance, mainly from environmental NGOs, and also due to the high costs involved.

“We are producing the greenest potassium in the world, focused on food security in Brazil and the world, and we want anything that could be a question to be raised so that we can analyze it and find a better way to do it,” he emphasizes. The executive points out that a large part of the potassium produced in other countries – and imported from Brazil – leads to an additional 1.2 million tons of carbon equivalent, because it is a process that uses coal as an energy source.

Espeschit says that, over the last few years, several details of the project have been revisited, following suggestions that were made. One example of this is the fact that, in the original project, there would be water capture from the Amazon aquifers, which are underground rivers.

“The environmental agency demonstrated that it would be more viable to capture water from the Madeira River itself. This will cost more than the wells, but we implemented what the environmental agency suggested to adapt”.

The financial challenge remains. Espeschit told AgFeed that around 70% of the US$2.5 billion will come from financing, in talks that are taking place with several credit institutions, including BNDES itself. Another part will come from equity. Brazil Potash, the controlling company of Potássio do Brasil, carried out an IPO on the New York Stock Exchange (NYSE) last year, which enabled the raising of US$30 million. The choice of the New York Stock Exchange was reportedly due to the strong mining market and a more traditional capital market. According to the executive, a follow-on in the US should be done “probably by next year” and new strategies, including on the Brazilian stock exchange, are not ruled out. “You can do what the market calls dual listing, that is, list on more than one stock exchange. And this is in our strategic planning as an alternative. So we can list both here in Brazil and on other stock exchanges around the world, such as, for example, the Toronto stock exchange. But nothing prevents us from also listing in London or Sydney, Australia,” he explained, highlighting that these countries are prominent in the mining market. Although the company reinforces its optimism, its shares in New York have accumulated a strong devaluation of more than 80% since the IPO. Brazil Potash shares were trading at around US$2.30 this Thursday, April 10, while in November 2024 they were worth more than US$13.

“This is common in stock market launches, especially when a project has been in existence for 15 years and you have investors who have entered capital calls with very low amounts,” explained the president. He also warns that the volumes traded are insignificant, which contributes to creating a certain “mask.”

He emphasizes that, in any case, he remains “very optimistic” about what he calls the “ship leaving the port,” with the start of activities at the site. “We will see this and the expectation is that whoever sold, sold wrong.”

For this year, with actions such as those related to fauna and flora, legal issues and the start of some works, in addition to archaeological mapping, investments of US$10 million are planned.

By 2026, the necessary investments should be between US$400 million and US$500 million, due to equipment that is starting to be purchased, according to Espeschit.

The funds are still being raised and will continue to be raised in stages. He says that imported equipment, for example, could be financed by a credit agency in the manufacturing country. The same applies to demands from Brazil, which, depending on the case, could even access Finame, from BNDES.

To attract investors, Potássio do Brasil is counting not only on its “thesis” that Brazil could become self-sufficient in potassium in the future or even an exporter of the fertilizer, but also on some contracts that have already been signed.

One of the agreements was made with the grain giant Amaggi, which will be able to buy 500 thousand tons of potash from Brazil Potash annually, over the course of 17 years. At the same time, Stan Bharti's company would use river transportation from Hermasa, which belongs to the Maggi family group.

“And we have a third agreement where they (Amaggi) could sell amounts above the 500 thousand tons that we closed with them”, revealed Espeschit.

Calculations made by the CRU consultancy, which specializes in fertilizers, indicate that Potássio do Brasil could generate an EBITDA of US$ 1 billion when it is operating at full capacity, between 2031 and 2032.

These figures may change, also depending on international geopolitical conditions that tend to influence fertilizer prices. Problems related to Belarus and the conflict between Russia and Ukraine have helped to cause price spikes in recent years.

Market analysts have also questioned the quality of the deposits in the region where the Potássio do Brasil project was installed, alleging a lower concentration of the nutrient, for example.

The company's CEO guarantees that this is yet another case of “fake news”. “There is no such thing, the product is standard, you only enter the market with the product if you meet a minimum specification”. “Our product has 95% KCL and our ore, our raw material, has an average content of 30%. You enrich it in a beneficiation plant to reach that 95%,” he added. According to the company, potash from Canada, for example, would have the same content, at 30%.

Brazil tours and update on flights and Visa's

Many of you have asked when would be a good time for a tour?

I cringe.

Things do not flow as smoothly as they did pre-pandemic.

- weird times for some flights. 

Good news is that Gol has come out of bankruptcy and is adding

flights again. 

Gol and Azul(Jet Blue) are talking about merging- more changes.

LaTam does not offer direct flights from Miami to Brasilia- only Gol.

April 10th, you will need to apply for E-Visa online and pay a small

fee before coming to Brazil. One will probably need to upload a copy

of bank statement to prove you have money to come to Brasil. 

pain in the ass

https://brazil.vfsevisa.com/

Sao Paulo airport is a nightmare(intimidating for a 1st timer)

With the new Wing 3 for international flights, it means

long walks and connection times- 4 hours is needed to

comfortably connect.  pain in the ass

Security lines are crazy- so much time wasted. 

I recently turned down a tour as I did the research for a 

Minneapolis to Cuiaba via Miami on GOL.  40 hours

to get there. Insane

12 hours in Brasilia airport and arrive at midnight in Cuiaba.

Nuts

One could fly to Sao Paulo and be to Cuiaba by 11 am the

same day and not midnight. Why? lack of flights

from Brasilia to Cuiaba. More being added now.

Good news there is a flight from Sao Paulo to Sinop, MT

no stops- which is a nice option.

Evening flight Miami to Brasilia is a nice option on Gol. 

7.5 hr flight, however one needs to sit in the

first 5 rows of the airplane- no matter the price.

You will die if you sit further back. 

Gol Brasilia to Miami is a day flight.

leaves 10 am arrives Miami 4 pm.

Works for some. 

Let us see if Gol and Azul merge. I like Azul for

regional flights, but not international as they use

Campinas/Belo Horizonte for connection airports. 

another pain in the ass.

https://www.reuters.com/markets/deals/brazil-government-supports-gol-azul-merger-strengthen-airline-sector-2025-01-28/

Transportation and hotels are expensive.

Back in 2012-2015 one could do a tour for

"US$ 3500" + international airfare per person and 

have a nice week in MT.

Today, figure US$ 6000/person + international airfare for

a week in MT. 

If you want to add in FOZ or RIO for a couple days, figure you

will spend US$ 10,000 dollars for 10-14 days in Brazil.

meals, presents, resorts, airfare, hotels, van, and misc. 

A couple nights in Sao Paulo is nice and a tour of Santos

port is also cool. Hotels in Sao Paulo R$ 800-R$ 1000/night. 

Rio R$ 2000/night 

Dollar 6:1 helps, but damn it takes money these days.

If you cant afford that- do not come and do not ask.

I have recently priced vans at various spots (Cuiaba, Foz, Palmas)

and hotels in Cuiaba are now R$ 600/night etc. Add in a nice restaurant

and drinks, and evening meal with 4-5 people is now R$ 2000.

It is just insane. 

Not sure where all this is going, but the good old days of a cheap

tour for a journalist or a few students are long gone. 

FYI

Kory

https://www.gcnoticias.com.br/politica/a-partir-de-abril-aeroporto-internacional-de-cuiaba-tera-novos-voos-diretos-da-gol-para-o-rio-de-janeiro/195191592

Starting in April, Cuiabá International Airport will have new direct flights from Gol to Rio de Janeiro

 January 18, 2025 

Centro-Oeste Airports (COA), the concessionaire that manages Cuiabá International Airport – Marechal Rondon, located in Várzea Grande (MT), announced that the enterprise will gain new routes and more flight options in the first half of 2025.

According to the concessionaire, starting in early April, the main air terminal in the state of Mato Grosso will receive a new direct connection from Gol Linhas Aéreas to Tom Jobim International Airport (RIOgaleão), in Rio de Janeiro.

According to GOL's forecast, the new route will be operated on Tuesdays, Thursdays and Saturdays by Boeing 737-8 Max aircraft, with capacity to transport up to 186 passengers. With this, the expectation is that the enterprise will have 15 nonstop destinations in the North, Central-West, Southeast and South regions of the country.

In addition to this new development, Centro-Oeste Airports also highlighted two other travel expansions to strengthen the air mobility of the capital of Mato Grosso. Gol intends to resume its daily flights to Congonhas Airport in São Paulo on February 3, and plans to increase the frequency to Brasília (DF) on April 1, jumping from the current six to nine weekly flights.

In total, the additions announced by the airline represent an increase of 20 thousand seats per month available to residents and visitors of Cuiabá and the region.

The CEO of Centro-Oeste Airports, Marco Antônio Migliorini, emphasizes that the dialogue with the airlines demonstrates the concessionaire's commitment to promoting new flights and destinations. “We invested more than R$280 million in expanding the passenger terminal and in several improvements at Cuiabá - Marechal Rondon International Airport, which is ready to receive even more travelers, and we always work together with airlines to further increase flights at Mato Grosso's main airport. The new Cuiabá-Rio de Janeiro route, operated by GOL, is extremely important for the population of Mato Grosso, connecting the state capital to one of the country's main cities, and the increase in the frequency of flights to São Paulo and Brasília shows the importance of Cuiabá and Mato Grosso for Brazilian commercial aviation", he says.

CHECK THE TIMETABLES OF THE NEW FLIGHTS IN THE TABLES BELOW:

New route - Cuiabá-Rio de Janeiro (RIOgaleão)

Starting on 04/01/2025

Origin

Departure

Destination

Arrival

Frequency

Cuiabá

10:15 AM

Rio de Janeiro

1:55 PM

Tuesdays, Thursdays and Saturdays

Rio de Janeiro

2:40 PM

Cuiabá

4:40 PM

Tuesdays, Thursdays and Saturdays

New flights - Cuiabá-Brasília

From 04/01/2025

Origin

Departure

Destination

Arrival

Frequency

Cuiabá

17:20

Brasília

20:00

Tuesdays, Thursdays and Saturdays

Brasília

08:40

Cuiabá

09:35

Tuesdays, Thursdays and Saturdays

In Memory of Gene Whitmer                                                                                          

When the student is ready, the teacher will appear. 

Gene was my webmaster, partner, mentor and friend

Nov 6th, 1942- 2024 (81)

Gene was born in a small town in eastern Oklahoma. He spent his youth riding back and forth to California with his parents. His father had a small farm and he would go to California to work to put together enough money to plant another wheat crop. Gene attended college at the University of Utah. After college, he signed up for the Peace Corp and was stationed in Mato Grosso do Sul, Brazil in the 1960’s. Gene was from the generation that listened to John F. Kennedy. “Ask not what your country can do for you- ask what you can do for your country”. 

After the Peace Corp, he got a job as a production manager at Johnson Wax in Rio de Janeiro. While living the good life in Rio, his draft number came up for the Vietnam War. He was stationed in Panama as a medic. He protected the “Americas” from the “Commies”, he would say with a chuckle. He took a job with the USAID and was stationed in Vietnam writing reports for the USA government and the CIA to gather intel on the situation. I think this is where Gene gave up on humanity. He would often say “We are all doomed”. He experienced so much death, suffering, deception, and “lack of a plan”. He and a buddy escaped Vietnam to Bangkok two days before the fall of Saigon. They watched it all unfold on TV while sitting in a bar in Thailand. 

Gene then took a job teaching English in Saudi Arabia. Later, he was an English professor at the University of Oklahoma. He met Zelia, Brazilian wife, and in 1986 moved to Goiania where he has lived ever since. Gene set up an office helping Brazilian students with their English. He would get them placed in USA universities. He would take great pride helping someone else succeed in life. 

Gene was a bit of a computer programmer/web designer and in the 1990’s set up a site called “Studyintl”. This worked well until Sept 11th, 2001. This is when his business started to retrograde with all the new restrictions for entry to the USA. 

Along comes Kory

I had been in Brazil for a couple years as a young father and trying to find my place. In 2005, via "Yahoo community boards”, we find one another as two gringo’s in Goiania. We would meet for drinks at Piquerias once a month and solve all the world’s problems. He was impressed with my knowledge of Brazil ag and all my adventures to date. He said, “Kory, you should start a blog”. What is a blog, I asked? 

Creativity is born out of necessity

We decided to try transfer his number one google ranked site from Studyintl to Brazilintl. We would upload content and photos of my adventures and create a Brazil “Wikipedia” for Ag. I would publish a newsletter and do tours for clients, students, journalists, and investors. 

Gene would handle all the website details and Kory would hit the road. We would meet for monthly pow-wows and butt heads on the future of the site and Brazil. He would suggest what needs to be changed, how I could improve, and where my weaknesses lie. His 30 year experience with Brazil was an invaluable resource as to how to deal with Brasilians, situations, relationships, and the culture. 

As I advanced, I could be of more and more value to new clients. I could see where they were making mistakes and advise them ahead of time assuming they would listen. 

He would often say, Kory, you are getting too comfortable. You are living the good life. Do not drop the ball here- inflation will eat you up in Brazil. You need to stay ahead of the curve, or when you least expect it, Brazil will change and eat you alive. Case in point, many of my gringo colleagues experienced this and are no longer in Brazil.

“Wealth is not an indicator of intelligence” Gene Whitmer

Gene had witnessed countless gringo stories and was an avid reader of history. He would give me his books on Brazil pioneers for my son and I to read. He would say- “just look at Henry Ford in the Amazon” or Olacyr de Moraes(Brazilian), the original soybean king in the 1970’s - he wanted to build his own railroad. Common theme, great ideas - failure to execute. I would often tell clients at the airport - “Check your ego at customs”, or Brazil will take it from you. “Stop thinking like a gringo”, you are under new house rules here. 

I look back at Gene’s 60 year arc of Brazil experience. How valuable that was to a newcomer. Gene never did anything for himself. He wanted to enjoy the good life and have the least amount of stress as possible. With that said, he would criticize newcomers to Brazil that they have no clue of what they are about to get into. 

I think back to Gene’s early Peace Corp days. This was to help developing countries with education, civil planning, health care, and indirectly keep the commies out because the USA is here to help. It was to help develop jobs and opportunities for the locals. One could say the Peace Corps had its place, but it really did not do that much. It takes the entrepreneur to take an idea to the next level. It takes venture capital to build the infrastructure. In later years, I would tell Gene: I think indirectly, you helped create thousands of jobs in Brazil. If it were not for us, the site, and the personal relationships developed- I do not think current  gringo clients, that have invested upwards of US$ 1 billion dollars in Mato Grosso in corn ethanol, would have ever happened. Corn ethanol would have likely evolved, but it would have been with different faces in different places. One needs to give those gringos credit for their ability to execute a plan. So many others before them have failed with their endeavors. I think you can take a little credit Gene that we did something good for Brazil. When you look over the span of 60 years, I think you could say we co-participated in the Brazil/Mato Grosso arc of AG history. We made a positive difference- even if it was in a small indirect way. Well done Gene. Thank you Kory- was his response.

RIP webmaster, mentor, partner and friend. 

Behind the scenes and a new BR planting season

 Sept 2, 2023

It has been awhile since the last blog. We have been busy behind the scenes.

I have been well, but we have been dealing with family members medical issues. Earlier in the year my son's childhood intestinal colitis returned while he was at college in the USA. He had a difficult Spring and Summer trying out new meds. He seems stable at the moment and he is studying abroad in Copenhagen, Denmark this Fall semester. He is getting some pre-med school practical experience there. So far, he loves being there.

My Father-in-Law suffered another stroke this Summer. He has not known us for more than two years. His significant other and my wife are dealing with that. It is not easy when a parent is in their final days. 

For the most part, Brazil, USA and the markets played out as outlined earlier in the year. Brazil started out with a 153 mmt soybean crop with a two million hectare increase year over year. The final crop size is in the 154 mmt area. Brazil's full potential was probably eight million ton more than that, but Rio Grande do Sul lost about eight million from its starting point for the year. The soybean yields in the MaPiToBa region were exceptional this past year. We hear reports of 80 to 90 sacs/ha soybean yields where 50 is the norm.The past two seasons, the Northeast part of Brazil has been blessed during the "La Nina" part of the cycle. As we move into peak "El-Nino", I think we will see different results from northern Brazil. 

Second crop corn has also performed much better than earlier expectations. The 2nd crop is said to be in the 108 mmt area. Late season rains with no frost allowed the later planted corn to mature to its potential in Parana, MGDS, and Mato Grosso. Mato Grosso is now producing more corn than soybeans. The soybean crop was 46 mmt and the 2nd crop corn was 50 mmt+. This is truly mind-blowing to me as I reflect on the evolution of crop sizes over the past 23 years. I remember when the corn crop in Mato Grosso was five million tons and the corn was worth nothing. The corn was worth about one dollar per bu and that was the cost of the freight to move to where they needed it. I feel like an old grandfather telling stories about the Great Depression. " I remember when" I shipped a cow to Fargo, ND in the 1930's and the value of the cow did not pay the freight  etc  etc......

The other data point that stands out to me is that Mato Grosso is much more significant than all of Argentina. Argentina soybean crop of 20/21 mmt and a total corn crop of 32-35 mmt is quite significant in the whole scheme of things. With El-Nino now in control, I would expect Argentina and southern Brazil to return to normal production levels. Who knows, in a few months we maybe talking about flooding in Argentina. They have Presidential elections in October. Argentina is on the cusp of a long term paradigm shift for the better, however, I fear it will get worse domestically for them before it gets better. They are in the final purge. 

Soybean and corn prices in Brazil have declined significantly over the past year. Paradoxically, the Brazil farmer is set to expand planted area yet again for 2024. We are looking for 500,000 hectares more soybeans and maybe a bit more. First crop corn continues to shrink and 2nd crop corn may decline a bit in 2024 as we see more hectares of cotton and wheat. 

The USA has had its challenges in 2023. The corn and soybean crop have suffered in the 9th inning. It seems like the USA has plenty of corn no matter the final number. The soybean crop is a powder keg. If the USA comes in at the 4.1 billion bushel level, that means the USA will need to import beans again in 2024. If Brazil produces a 165mmt+ crop, she can solve the problem. All Brazil needs to do is let out a small fart and one million tons will arrive at USA ports. However, if the Super-El-Nino manifests by the end of 2023, I would think we will have echos of the 2015/2016 growing season at some point. This does not mean disaster, but it does curtail Brazil's potential to shoot the moon in 2024. The kicker is, even if Brazil loses 10 mmt in a given region, that still is a repeat of 2023 soybean production and a near record crop again. It would take a loss of >10mmt in order to grab the market's attention assuming Argentina is normal. The USA domestic market has bullish tendencies but South America can solve the problem by Spring 2024. What do we do with that?

https://www.brazilintl.com/

I thought back in February 2023 that we would see a "nut cruncher" rally in the summer of 2023. We had a three dollar rally off the May 31 low. I thought we would have a high in late August or early September. It looks like soybeans put in a high last Monday on August 27th. 

Soybean prices are likely range bound until we get a better grasp of USA yields and production potential.  A range of 13.25 to 14.25 probably defines the market. If the USA comes in at 4.2 billion bu or more, down we go. If the USA has a smaller yield, then up we go to curb demand. 

Until we see a 30 day dry spell forming in Brazil, soybeans will likely be range bound. However, any talk of early planted beans needing to be replanted because of burnout, that will grab the market's attention. I still think we have a shot at higher prices basis March and May 2024 soybeans into January and April 2024. What is the catalyst? I am not 100% sure. Could be USA production, War, demand, and/or Brazil production problems. It might be just an inflation hedge as commodities remain popular to own during these uncertain times. 

If there are good rains in Brazil in November and December, we do need to be realistic that soybean prices could crash with a 165 mmt crop on deck. A 165 mmt Brazil crop kills the bull no matter the size of USA soybean crop.  A 155 mmt Brazil crop maintains prices and the hint of a 145 mmt Brazil crop sends soybeans prices back to 17-18 dollars. The next 3 or 4 months tells the tale on the future of soybean prices. Are we headed to US$ 10.50? or US$ 17.00? or do we maintain US$ 13.50 to 14.00 until we are certain of South America saturation of the protein market once again. Given the extreme heat around the planet and the recent record high temps in Bolivia and Peru, I would say the risk is to the upside yet. I do not think the bullish story is completely over with quite yet. However, we are in the 8th or 9th inning and we have the USA harvest for the next 45 days. A "light" USA soybean crop and any 30 day dry spell in Brazil will light the fuse. How far do we go? Well, money flow and funds tend to drive that story. 

I will be sending out updates to those on my subscriber list and VIP distribution list in the coming months. Sometimes, I send out several updates per day to those on the VIP list. It depends on your interest and needs. 

Good luck with harvest and I enjoy hearing from all of you.

Abracos

Kory

agturbobrazil@yahoo.com

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