American LLC for sale in Tocantins

http://www.brazilintl.com/agland/farms4sale/01/0101.htm#.UrgLV9JDtl6

Drop me a note for more info.

Kory

Lucas do Rio Verde ag show March 25-28

For those interested in an early ag show in Brazil combined with
Mato Grosso tour, the new Show Safra 163 March 25-28 is the
perfect option.

They are combining two shows and making one.

Hotels will be limited. Book early.

All other big ag shows are April and June.

It is difficult for many to get way.

FYI

Soybean bugs

I am headed to Mato Grosso on Friday.

There has been some news talk of the attack of the
caterpillars in some locals.

I am not too worried about the bugs. They can be
controlled. It might cost some extra money on a year
with thin cash flows, but I would not lose any sleep
over them.

Bahia and Parana have been on the cusp of  too dry
of late. This is not a Def Con concern at this point.
Western Mato Grosso is also talking about limited stands
because of early germination issues. Maybe the possibility
of losing 1 or 2 bushel per acre potential. Again, not a
Def Con issue.

http://en.wikipedia.org/wiki/DEFCON

Two years ago, subscribers remember when I went to
Def Con 2 on the drought seriousness at the time.

I think we are still looking at a wicked big crop.
It all depends on if we plant 500,000 or 1 million ha
of double crop soy.

Thy Soy Cup Runneth Over.

The soybean crop is fine.

More later when on the road.

Bunge -Maggi Joint venture barge traffic on Tapajos River

http://www.scotconsultoria.com.br/noticias/agronegocio-na-midia/32565/bunge-e-amaggi-criam-empresa-de-navegacao.htm

The American multinational Bunge and Amaggi - André Maggi Group company, the senator and former governor of Mato Grosso, Maggi - just created a joint venture inland waterway transport in the country.

The Navigations Nations Tapajós (Unitapajós) will be responsible for the transport of grain from Mato Grosso the waterway Tapajós-Amazon to Santarém (PA), an alternative lower cost to businesses. With an initial investment of 

R$ 300 million, equally divided, the company will build 90 barges and 5 tugboats.

The Unitapajós intends flow approximately 3.7 million tons of grain in three to four years and should start operating already this season of 2013/14.

Source: Economic Value. By Bettina Barros. October 30, 2013.

This is a really neat development.

The barges may beat the train project to functionality.

This will help knock a few miles off the truck route to Santarem.

There are hydro-electric dams either planned or being built up stream 

from this point. 

The irony is that the past few years, Mato Grosso has been surging

at a rate of 4 to 6 million tons of crops per year.

Thus this new idea only deals with 10% of the growing problem.

But this will help take the pressure off of the southern ports

in time.

This is one small step for soybeans-a giant leap for soybean-landia.

Fiesp 2023 Brazil soybean production projection

Here is a chart from a recent Fiesp presentation.
They are thinking that Brazil will be at 119 million tons
of soybeans by 2023.

Given recent expansion rates, it should be no
problem to get there. BUT, we need shipping
logistics and soybeans in Chicago to stay above
10 dollars/bu and preferably 11 dollars/bu consistently 
to foresee these volumes come to fruition. 

What is new?

The month has been crazy.

After an 18 month ordeal clients of mine closed on a land purchase in
Mato Grosso. It took a dynamic team, money, patience, and an
emotional fortitude that many do not possess. It takes trust with
Brazilian counterparts to finesse difficult situations and obstacles.

Something always pops up in Brazil.

On top of that were some personal surprises.
Medical procedures for my son where the reception forgets
to schedule an anesthesiologist. A root canal for myself.
And to cap it off but good, a prank call from kidnappers
saying they have my son and want a ransom. This call
came while he was at school. One sees one´s life pass
in front of you when dealing with kidnappers for 10 minutes.
It really rattles the nerves.

Brazil has increased its benchmark interest rate to 9.5%.
They say 10% is soon to come.
I read in local paper that credit for buying a new car
is much more difficult to get than last year during the
stimulus phase. Goiania has record number of car
Re-po´s at the moment. A sign of the times.

Apartment prices seem strong yet. I wonder for how
much longer. Neighbors of mine that are typical middle
class. He is a professor and wife manages the car wash.
They made a down payment on an R$ 800,000 earlier
this year. The building will be ready in 2016.
I visited this hole in the ground last week. The apartment
design is fantastic. I was told there was one unit left.
I said I can´t afford this. This is the same apartment building
that my neighbor bought. I have had a difficulty getting R$70
a month out of them for garage rent for their 2nd car. I had
extra spot for them. How the hell are they gonna pay for
R$800,000 apartment? It is so easy- make a small down payment
and then monthly payments for 3 years and then a big balloon in three
years?  Then what?  boom?
This real estate market in Brazil is looking more and more
like USA market circa 2006-2007.

By now some of you want some soybean gossip.
Planting has started and we are off to a good start.
Rains have been good and crop is off to nice start.
The biggest problem will be the carryover of the 2nd crop
corn in many locals. Many are hoping to set a cup of milk
out next to a pile of corn and hope like hell Santa takes
the corn with him Christmas eve. New crop soy will be ready
Janaury 1, 2014. Record crops are expected in all regions
and there is simply not enough storage.

Expansion and productivity are out running the grain merchandisers
ability to build mega- warehouses fast enough.
Brazil is burying herself in corn and soy.
Sure hope China is hungry.

Local prices for 2014 soybean crop for Mato Grosso is about
R$43/sac or US$ 9.00/bushel.
yes,  - 4 dollars basis. I will repeat minus 4 dollar basis to CBOT.
enough said

Cash flows are running tighter than last two years. There still is
a nice return over variable costs, but if we add in land and depreciation costs,
we are looking at a break even scenario.

Stores are starting to put out Christmas decorations here. Tis the season?

I have increased the price of newsletter for newcomers. I tend to
send out a daily Brazil nugget about something or another for
either Brazil or Argentina. I am trying to focus my energies on my
VIP client list.

School year ends here December 6th. I plan to be at Rio Quente
soon thereafter for a break. If time and finances allow, I will take
family to Disney/Orlando in January.

I have an executive Mato Grosso tour scheduled for mid February
from Washington, DC and NYC.

At the current time, it looks like South America is going to
produce so many soybeans that the earth will like flip over
on her axis by March 2014. It won´t be a magnetic pole shift. It
will be called the soybean shift in the agricultural history books
of the future. 2014- the year the protein shift took place........

Mato Grosso corn ethanol mill

http://www.valor.com.br//agro/3282234/cresce-aposta-na-producao-de-etanol-de-milho#ixzz2fvFkDvP3

Growing investment in ethanol production from corn

By Gerson Freitas Jr. and Fabiana Batista | De Sao Paulo

Joao Brito / Value / Joao Brito / Valor

Franz of Fiagril says that corn ethanol is competitive with cane

After much to enhance the economic and environmental advantages of ethanol from sugar cane over that produced from corn on a large scale in the United States , Brazil may be about to replicate - at least partly - the American model .

Given the enormous difficulty to digest the dizzying growth of corn production in Mato Grosso in recent years , entrepreneurs make to take account of the role of plants capable of turning grain into biofuel .

If successful , the strategy can mean an alternative energy source for North Central Brazil , where fuel prices are the highest across the country - and a way to achieve at least part of the still huge potential for expansion of maize production in Mato Grosso .

 Fiagril a soybean crusher national capital , based on Lucas do Rio Verde , plans to invest U.S. $ 100 million 

(R$ 230 million ) to produce corn ethanol by 2015 .

The company plans to build a plant with a capacity to crush 500,000 tons of grain per year , sufficient to produce up to 200 million liters of biofuel .

If completed , will be the first ethanol plant in the country designed exclusively for crushing corn. Currently , two plants of cane sugar in the state - and Usimat Libra Ethanol - are adapted to process the grain .

The intention is to fund Fiagril up to 80 % of the investment from the Fund for the Development of Amazonia ( FDA ) and the Constitutional Fund for Financing the Midwest ( FCO ) .

According to co-founder of Fiagril Marino Franz , the lines have been secured and the agreements should be signed with Banco do Brazil later this year . The expectation , he says, is to start building the plant by April 2014 and complete it in 18 months .

The processing technology to be adopted in the plant belongs to the ICM , one equipment manufacturer from Kansas , USA , that provides for at least one hundred plants in the Midwest .

Currently , Mato Grosso produces just under 1 billion liters of ethanol from sugar cane . Franz says that biofuel corn is competitive with the cane . " With the price of maize at R$ 13 per bag [ minimum price guarantee in the state ] , we have a margin of up to 20 % compared to sugarcane ethanol sold in the state." In Sorriso , the price of corn fell below R $ 8 last week , according to the Mato Grosso Institute of Agricultural Economics (IMEA )

The bill, ponders , takes into account the income generated by a by-product of high added value - DDGS ( abbreviation for Dry Distillery Waste Containing Soluble ) - which can be used as a substitute for soybean meal . Each ton of corn can be transformed up to 400 liters of ethanol and 330 kilos of DDGS .

Amaggi , a company controlled by the family of Senator Maggi also makes plans to build a plant , although it has not completed feasibility studies .

As Maggi , the uncertainty lies in the cost of energy needed to power the plant . " This is our main question mark. Lack of energy balance to account ." Maggi remember that the plants sugar cane generate their own energy by burning bagasse . The corn plants , in contrast, rely on other sources of biomass , such as charcoal and grass .

" This is a problem that each plant will have to solve. Amaggi has 5000 hectares planted with eucalyptus trees , which could be used to fuel our plant at least until we have shale gas , which should happen in a period of ten years , "said the senator, referring to the gas reserves of the state.

Fiagril says it will encourage the planting of 5000 hectares of eucalyptus and grass , through long-term contracts with farmers to feed the plant. The idea is to encourage these crops in areas sandier , unfit for planting grain .

The project financing corn ethanol has been the subject of some polling firms with BNDES , according to information from the Head of Biofuels from state development bank , Carlos Eduardo Cavalcanti .

The executive said that the matter is being discussed internally , but , although the rate institution that makes sense this kind of business before the need for greater supply of liquid fuels in the country , was prompted companies to a more well-founded on the economic conditions of projects .

For farmers , which more than tripled corn harvest the last three years - from 6.9 million to 21.9 million tons - and now rely on subsidies to transport this production , ethanol is seen as a way to give support to increase production - still small relative to the potential of the State .

Only in 2013 /14, the federal government should spend more than R$ 1 billion to support the marketing of grain in the state through direct purchases and grants . " Mato Grosso just do not plant more corn because it has to sell and whom to sell , but do not lose much in planting corn because it is necessary to rotate with soybeans and cotton ," says Maggi .

Senator argues that the cost of amortization of investment in corn ethanol may be less than the cane , since the plants would integrate the current system of agricultural production in the State . " The Americans were very smart in deploying the plants in the fields of grain . Unlike cane sugar, which requires a whole new infrastructure , corn is only necessary to make the plant " .

In less than a decade , the United States increased by more than 100 million tons of corn production just to meet the ambitious targets of ethanol blending with gasoline . However , the American program was supported in a term that in practice , created a market reserve for biofuel .

Without such an incentive , the outlook for ethanol Mato Grosso are far more modest . At first , says Franz , corn ethanol would be competitive in markets such as the states of Mato Grosso , Pará , Acre and Amazonas .

According to the National Petroleum Agency ( ANP ) , these countries consumed last year about 2.2 billion liters of gasoline and about 1.1 billion liters of ethanol ( between the anhydrous mixed with gasoline , and hydrous sold to the consumer at the pump ) . It is, therefore, a small market compared to the national order of 20 billion liters , largely fueled by sugarcane mills in the Center- South .