Big Lands Brazil

Farming

All investors should know that Brazil is the largest exporter of coffee, soybeans, beef, sugar cane, ethanol and frozen chickens in the world. This is why Big Lands Brazil's mission is to assist institutional and private investors to access and profit in this market.

The best investment is to find a cattle farm that is in operation and to transform this into a soy, rice or corn farm. Doing so requires more work and attention, however Big Lands Brazil is on the ground to assist in this type of project.

The second best investment in farming is to find an existing proven operation and to purchase this operation as it is far easier to buy a cash flowing operation than to start from scratch where there will not be immediate return. This option as an investment typically results in a slight premium on price. However there is far less risk.

Distressed assets here in the farming sector are not common because no matter what happens they are typically profitable. The only way that a property would become distressed is if a landowner of a farm bad investments that put the farm at risk. This is common in Brazil and there are some farms that are distressed, but they are typically sold in a very short period of time. BLB specializes in finding these opportunities for our clients.

Big Lands Brazil has a strategy for our Investors:

• Source the best farming investment
• Structure the sale
• Negotiate on the price for the investors
• Act as Director for the investor
• Act as management company for the investor and to oversee local managers
• Create off-take with the local commodity distributors

Our Current Property and Project Offering:

• All Farms for Sale (PDF)
• Details on Farms 1 to 3 (PDF)
• Details on Farms 4 to 6 (PDF)
• Details on Farms 7 to 9 (PDF)
• Details on Farms 10 to 12 (PDF)

Please contact us for more details.

Farming S.W.O.T. Analysis

Strengths

• Excellent ROI
• Working to maximize already deforested pastures
• Multiple market end users - food demand is increasing
• Guaranteed future market
• Relative low setup costs
• Easy to administrate
• Low risk for all involved
• Short term return on investment

Weaknesses

• Drought

Opportunities

• Unlimited marketing potential
• Anticipated prices increases

Threats

• Drought
• Fertilizer Expenses Increase due to overall high pressure on commodities, this will undermine margins

Suppy & Demand

There is high demand and finite supply.

Nearly all the land that has logistics for export and in stable regions of the world is in cultivation or will be in cultivation over the next 15 years. Investing in farmland now, before all the land is in cultivation, is a wise choice.

Supply versus demand for food is similar to peak oil. After we reach the peak of finite farmland the world will only be able to increase food supply by investing in existing farms and making them more productive. To make them more productive means the prices need to go up and profit margins need to increase for the farm owners.

An example of this is what has happened in California, in the central Valley. The land supply ran out so the land values were forced higher, and the farmers needed to gain more productivity to compensate for the higher value.

Further detailed Information on Farming in Brazil can be found at About Farming in Brazil.

About Farming

Brazil is endowed with vast agricultural resources. There are two distinct agricultural areas. The first, composed of the southern one-half to two-thirds of the country, has a semi-temperate climate and higher rainfall, the better soils, higher technology and input use, adequate infrastructure, and more experienced farmers. It produces most of Brazil's grains and oil seeds and export crops. The other, located in the drought-ridden northeast region and in the Amazon basin, lacks well-distributed rainfall, good soil, adequate infrastructure, and sufficient development capital. Although mostly occupied by subsistence farmers, the latter regions are increasingly important as exporters of forest products, cocoa, and tropical fruits. Central Brazil contains substantial areas of grassland with only scattered trees. The Brazilian grasslands are less fertile than those of North America and are generally more suited for grazing. This leads to the first region to have a better economy, and they can sell all of their crops for money for their people. The second region would have a hard time with this because they would not have as many crops to sell. That is how this kind of agriculture can affect Brazil.

The history of agriculture in Brazil in the colonial period and beyond is intertwined with the history of slavery in Brazil. Since the abolition of slavery in 1888 by the Lei Áurea ("Golden Law"), the practice of forced labor (trabalho escravo) has remained commonplace in agriculture.

During the dictatorship period, agriculture was neglected and exploited as a means of resources for the industry sector and cheap food for the urban population. Until late 1980s export and prices were controlled, with quotas on exports. This has changed since the early 1990s.

Brazilian agriculture is well diversified, and the country is largely self-sufficient in food. Agriculture accounts for 8% of the country's GDP, and employs about one-quarter of the labor force in more than 6 million agricultural enterprises. Brazil is the world's largest producer of sugarcane and coffee, and a net exporter of cocoa, soybeans, orange juice, tobacco, forest products, and other tropical fruits and nuts. Livestock production is important in many parts of the country, with rapid growth in the poultry, pork, and milk industries reflecting changes in consumer tastes. On a value basis, production is 60% field crop and 40% livestock. Brazil is a net exporter of agricultural and food products, which account for about 35% of the country's exports.

Half of Brazil is covered by forests, with the largest rain forest in the world located in the Amazon Basin. Recent migrations into the Amazon and large scale burning of forest areas have placed the international spotlight on the country and damaged Brazil's image. The government has reduced incentives for such activity and is beginning to implement an ambitious environmental plan - and has just adopted an Environmental Crimes Law that requires serious penalties for infractions.

Agriculture - products: coffee, soybeans, wheat, rice, corn, sugarcane, cocoa, citrus; beef

Cattle

Brazil in 2005 slaughtered over 28 million head of cattle, producing in the process around 8.7 million tons (19.1 billion pounds) of beef. The country also became world leader in beef exports in 2003 after surpassing Australia. The cattle herds are concentrated in the states of Mato Grosso, Mato Grosso do Sul, Goiás and Minas Gerais, together they account to over 46% of Brazilian cattle with more than 87 million head of cattle.

According to the Ministry of Agriculture Brazilian beef production grew on average 6.1% a year from 1990 to 2003 and reached 7.6 million tons. In 2003 Brazil exported over 1.4 million tons of beef, exports which earned the country around $1.5 billion. Also that year total exports of the leather complex passed the $1 billion mark.

Corn

Brazilian corn production is concentrated in the state of Paraná, which has since 2000 produced on average 26.75% of corn in Brazil. The state of Minas Gerais comes in a distant second, with an average participation on production of 13.18% since 2000.

Rice

Productivity per hectare has surged 61% since 1990 but production remains highly concentrated on the state of Rio Grande do Sul, which grows on average 48% of all rice in Brazil.

Soybean

Brazil is the world's second largest producer of soybeans. Brazilian soybean production has increased more than 3000% in the last 35 years. The states of Mato Grosso and Paraná together grow on average since 2000 over 49% of all soybean in Brazil. Per hectare productivity has increased 37.8% since 1990.

Soybean and soybean derivatives exports in 2005 alone earned over US$ 9 billion for Brazil.

Wheat

Brazil’s tropical climate is not very suitable for growing wheat, this problem is reflected in the fact that two of Brazil's coldest states, Paraná and Rio Grande do Sul, account for over 90% of wheat production. Despite the internal production Brazil has to import around US$700 million in wheat every year.

Sugarcane

Brazil during its early colonial time depended heavily on sugarcane for its economic well-being. Today Brazil leads the world in sugarcane production.

Sugarcane production is concentrated in 8 Brazilian states: São Paulo, Alagoas, Pernambuco, Minas Gerais, Mato Grosso, Mato Grosso do Sul, Goiás and Paraná. Those 8 states are responsible for 90% of the total production.

Brazil harvested 558 million tons of sugarcane in 2007, representing a growth of 17.62% over 2006. For 2008 Brazil harvested 648,921,280 tons, of which total 89% or 540 million tonnes was used for sugar and ethanol production, the other 11% used for cachaça and rapadura production, as animal feed and as seeds. Ethanol production in 2008 is predicted to reach at least 26.4 billion liters.

CONAB (Companhia Nacional de Abastecimento) said that in 2007 sugarcane cultivated land increased by 12.3%, to 69,000 square kilometers. In 2006 62,000 km² of land was devoted for sugarcane in Brazil.

Problems with Agriculture

Seventy-five percent of Brazil’s greenhouse gas emissions are the result of deforestation and changes in land-use to pave the way for production of livestock and crops. Brazil's greenhouse gas emissions from agriculture have increased 41 percent between 1990 and 2005. Cattle are a major factor for these emissions. An estimate carried out by Friends of the Earth-Amazonia (Amigos da Terra - Amazônia Brasileira), the Brazilian National Institute for Space Research (INPE), and the University of Brasília concluded that fully half of Brazil’s greenhouse gas emissions between 2003 and 2008 came from the cattle sector. If all parts of the "cattle chain" had been included, the researchers add, the proportion of greenhouse gases attributable to Brazil’s cattle would have been even larger.

Brazil's cattle and soy production are concentrated in the Legal Amazon and Cerrado grasslands regions, and have resulted in considerable biodiversity loss, deforestation, and water pollution. As of 2007, about 74 million cattle, or 40 percent of Brazil’s herd, were living in what is known as the "Legal Amazon." Almost a million square km (386,000 sq mi), or nearly half of the Cerrado, have been burned and are now cattle pasture, or cultivated for soybeans, corn (both primary ingredients in livestock feed), and sugarcane, for ethanol production. According to Brazilian journalist Washington Novaes, "if we consider the viable fragments of the Cerrado, those with at least two continuous hectares (5 acres), only 5 percent of it is left. It’s a very severe level of habitat loss." At least one quarter of Brazil’s grain is grown in the Cerrado region.