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Corn+Soybean Digest

Day 14 - Campo Grande, Brazil

Thursday – February 8

Non-farm Commercial Stop #8

Today, we left the hotel and drove to one of Brazil’s cattle research facilities located near Campo Grande. Their main research emphasis is on pasture and cattle nutrition and health. The facility includes 3,000 hectares of grain and pasturelands.

Brazil has 160 million heads of cattle. The state of Mato Grosso do Sul leads the country with the most cattle with 20 million heads. Sixty million tons of beef are produced annually. Work is being done on trying to decrease the age when the cattle are slaughtered.

They do considerable research on cattle insect pests such as ticks and the horn fly. They are concerned about the environment in their research. This facility is more concerned about applied research rather than scientific research.

Their key basis is good pastures. Two main breeds of cattle are the Nelore and Zebu. The Nelore is the white breed with the hump behind the neck. They came from India and are purebred. No crosses have improved the breed. They believe some crosses will happen in next 10 years.

Cattle used to be slaughtered at an age of about 48 months. They do not feed grain, only pasture. Now, with improved pastures, slaughter ages are 24 to 28 months. This makes for more tender meat and it is more economical for the beef farmer. Live weight for slaughter is about 470 kilograms (1,036 pounds).

During the dry season, it is necessary to supply supplement and some corn to cattle being raised for slaughter. The cows receive no supplement during the dry season. The beef farmers don’t like to grow grain because of background and culture. They said the traditional beef farmer doesn’t like the grain farmers, and the beef industry hasn’t changed much in the last 10 years. The state exports 500,000 to 600,000 tons per year. This is similar to our old west.

There are very strong beef cattle herds in the Pantanal. But the Pantanal floods during the rainy season. The beef farmers in the Pantanal have over 200 years of experience. The only other economic activity in the Pantanal is tourist.

They say no one can prove that we have mad cow. The day we were at the facility, French Canada had placed and embargo on Brazilian beef. The price of cattle that day, according to our guide, went down about 30%. They said Brazil does not have the mad cow risk, but they are being accused because some European cattle were imported in 1996.

An important point on soybeans and beef economics was made. They said if soybean prices continue poor for a long enough time, these grain fields will go back to pasture. The reality of this happening is somewhat unlikely. You cannot put cattle into a rotation like you do corn-soybeans-cotton. It takes several years to build up the herds and get the pastures into production. World soybean prices will have to be very poor for a very long time before the Brazilians put their soybean fields back to pasture.

Non-farm Commercial Stop #9

After leaving the research facility we drove to the ADM crushing plant near Campo Grande. Here we toured the receiving and shipping areas. The soybean harvest has started about 1,000 kilometers (621 miles) north of here. Lots of trucks were in line to unload. We talked to one driver while his truck was being unloaded. (See picture) This truck left the farm yesterday at 6 a.m. He arrived at ADM at 3:30 this morning. It is now 10:30 a.m. and they have just finished unloading it. This truck is a 6-axle setup and hauls 41 metric tons of soybeans (1,506 bushels). The driver owns the truck, and his brother was the 2nd driver. He charges $20 U.S. (40 reals) per ton to haul here. At the time of our discussion, we were getting about 2 reals for $1.00. Thus, his hauling charge was about 55¢ per bushel to haul 621 miles. It took him 16 hours to get here and another 7 to unload. He said he will return empty and it will take about 12 hours to get back to the town of Lucas Rio.

These trucks are setup to haul all types of freight and many haul soybeans to the processor or ports and back-haul various products. The soybeans were unloaded through slots in the floor of the trailers. This meant 2 workers had to crawl up into the trailer and clean and scoop out what did not gravitate through the floor. Then they crawled out of the trailer and air sprayed off the beans laying on the spare tires and fenders. The unloading systems seem very inefficient. However, here was another case where labor is cheaper than equipment. Most of these people are making between $200 and $500 per month.

There were other trucks in line with 3 axles and they haul 28 metric tons (1,028 bushels).

ADM exports meal through several ports including the one we visited – Port of Paranagua. As we walked to the shipping area, we saw an area where lots of small diameter trees were stored. They were grinding the trees, and the wood is then burned to heat the boilers because wood is the cheapest source of fuel. They use fast growing Eucalyptus trees that mature in 7 years from planting. Most of the big crushers have their own forests. The government has various regulations covering the cutting and reforestation.

At the shipping area we saw trucks being loaded with bulk oil. We went through part of the warehouse filled with thousand of boxes of bottled cooking oil. Every box was labeled Sadia (the company where we stopped in Campo Verde with all the chicken contracts).

This was a very interesting stop, and I would be surprised if we could go through a plant like this in the U.S. Hans, the man in charge of our tour, said he had tried on various occasions to get tours in the U.S. with no success.

Non-farm Commercial Stop #10

After a light lunch in a local cafeteria, we traveled to the outskirts of Campo Grande to an industrial park. Here we toured a tannery. The timing (right after lunch) and the smell just about gagged some of group. Hides are brought to the facility by the bulk truckload from the slaughtering plant. The hides are picked up one at a time by two workers and run through a machine to flatten the hides. After various processes the hides are put into a huge rotating barrel and heated for about 24 hours. Then they are run through a press and ultimately put in stacks and wrapped in black plastic wrappers. The bundles are exported to shoe manufactures and other leather manufactures for such things as purses and billfolds.

Farm Visit #11

We left the tannery and proceeded to a small dairy farm about 20 miles outside Campo Grande. After seeing the huge soybean and cotton farms, this stop was a return to reality of many of the smaller Brazilian farms. The farm looked like one that was typical of the area where I grew up in Northern Indiana 50 to 60 years ago. They milk 75 cows and raise their calves. They produce their own corn silage and forages. The milking area was modern, and the milk is processed on the farm. Some is put into cartons and the rest is made into yogurt and cheeses. Again, the cheap labor versus equipment was very evident. Several farm workers were unloading silage from a wagon by hand. The general setup of the farm indicated that a lot of hand labor is used instead of equipment.

We left the farm and drove back to Campo Grande on a different road. This road had hundreds of trucks on it and we passed several large truck stops similar to those in the U.S. We arrived at the hotel about 4:30.

Non-farm Commercial Stop #11

That evening we met at the headquarters of the Rio do Production Rural. This is a large farmer’s organization of Mato Grosso do Sul. The building was fairly new and reminded me of the new Rural Electric or Indiana Farm Bureau buildings in Indianapolis. We went into their very nice and plush auditorium for a presentation on more agriculture statistics of Brazil and Mato Grosso do Sul. Most of the information was data that we had already received during previous days in Brazil.

Again, they had a huge barbecue, and afterward, one of the best guitarists that I have every heard put on an hour long show. The fellow is only in his early 20s, but he could match or beat Chet Atkins or Garth Brooks any day. Oh my, what a performance. After lots of social discussion with various officials, we left and returned to the hotel at 11:35 p.m. Another long day!

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For 2002 Travel Plans to South America see:

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