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Corn+Soybean Digest

Day 9 - Curitiba and Cuiaba, Brazil

Saturday – February 3

Plane ride #4

Flew about an hour from Curitiba to Brasilia, capital of Brazil.

Plane ride #5

Flew about an hour from Brasilia to Cuiaba in the state of Mato Grosso. We arrived at the airport about noon.

On a bus ride to our hotel, we were told that to check our main baggage into the room and then pack a small overnight bag for an immediate departure for an overnight stay in Campo Verde. None of us were previously aware of this change in the itinerary. Not knowing what to expect and where Campo Verde was, I had visions of going north from Cuiaba deep into the jungle loaded with malaria carrying mosquitoes. In reality, we drove about 3-hours east-northeast of Cuiaba to some of the most fascinating cropland in the world.

We drove through a small mountainous area shortly after leaving Cuiaba. We entered what I believe to be a plateau of. absolutely unbelievable farm country. I have been to most of the major agriculture areas in California, Washington, Arkansas, Mississippi, Colorado, Iowa, Illinois, Indiana, Ohio, Western New York, Missouri Boot Heel, Texas and the sugar cane areas and ranches of Florida. However, I have never seen anything like we began to see and would continue to see for the next six days! I could take you to areas in the U.S. that have small areas of what we saw. But to go for miles upon miles and to look as far as you could see – gently rolling fields of excellent looking soybeans and cotton, was almost more than we could grasp. It was like seeing the northeast Arkansas Delta, the Iowa farm country and the Illinois prairie farms all wrapped into one package. And so for the remainder of this day and the 5 days to come, our group saw as many soybeans and cattle farms as we will probably ever again see!

We entered the town of Campo Verde about 3-hours east-northeast of Cuiaba. According to our local guide, this town was nothing but a gas station in the road in 1986. Today, it has a population of about 30,000. And it is all because of soybeans. We saw at least 5 huge grain terminals including several with familiar U.S. names. We saw several farm equipment dealers along the highway including New Holland, John Deere and local Brazilian manufactures.

Non-farm Commercial Stop #2

Our first stop was at the Sadia Corporation. They are a large feed processor and contract grower. They have about 6 million broilers under contract with farmer growers. They have over 300 broiler houses in this immediate area. Six turnovers of chickens are made through each house. The farmer owns the buildings and furnishes the labor. Sadia furnishes the chickens and the feed. Each bird weighs about 2.6 kilograms (5.73 pounds) at 50 days. Labor cost is about 19¢ per bird.

Farm Visit #5

We went about a mile out into the country to one of their chicken houses. It was hot and humid and about 3:30 in the afternoon. We could see thunderstorms building in the distance and within a short time we experienced a very heavy rain with lots of lighting. They told us that the rainy season is October to May, and that it rains almost every day in January and February. Remember their January and February is our June and July. The weather is similar to the afternoon thunderstorms that typically occur in the summertime in Mississippi.

Sadia also contracts a lot of turkeys. Sadia is in 5 Brazilian states and also produces feed for pork and beef production. They are on the stock exchange and employ about 25,000 people. They slaughter 40 million broilers per year, process 25,000 tons of feed per month and have storage for 40,000 tons of feed at Campo Verde. They produced 205,352 tons of feed at Campo Verde in 2000. They said they produce 35 kinds of feed. They purchased 188,207 tons of grains in 2000, and have 8 setups like this for processing feed.

Most of the feed is for broilers, 80,550 tons. Second was swine feed and 3rd was turkey feed. They told us that Smithfield in partnership with Carroll was investing $100 million for contract hog production in Mato Grosso. They said Smithfield would have about 45,000 sows. This was the first we had heard of this, but a few days later we were in a meeting with the mayor of the city where Smithfield is locating.

The people at Sadia said they used to own a crushing facility. However, they now buy their meal from a crusher in Cuiaba or Rondonopolis. They said the state of Mato Grosso has 19 million heads of cattle. In the Campo Verde area there are about 110,000 heads. Very few cattle are fed any corn (less than 5%).

The headquarters office for Sadia is in the city of Sao Paulo. Their web site is . Wages for workers are about $200 per month U.S. or $2,400 per year. Information about typical labor wages began to be an important fact in our groups thinking. We found in Argentina as well as Brazil, that $200 per month will get you tractor drivers, and about any kind of agriculture worker.

As we continued our travels in the agriculture areas of Mato Grosso, and later into the state of Mato Grosso do Sul, we found that their wages are a very important factor in the kinds of machinery they use. In several situations we saw that it was cheaper to use manual labor than to invest heavily in labor saving equipment. It was very evident that our group felt the wages and lower chemical prices allowed these farmers to stay very competitive with the U.S. farmer. Neither Argentina nor Brazil has any government farm subsidies. But when you get to the bottom line, because of the wages and chemical costs, they can compete with the U.S. farmer.

By the time we left Sadia Company, it was nearly 6 p.m. We now found out why we had brought an overnight bag. Thinking that we were about to check into the local hotel, I didn’t understand why we didn’t just drive back to Cuiaba and be in the nice hotel by 9 p.m. We found out that we were going to visit a farm 40 kilometers (25 miles) from Campo Verde yet tonight. Keep in mind that it is 6 p.m. and the area had just received a tremendous heavy thunderstorm. Well, I am thinking that here goes another night of getting into the hotel at about 11 p.m. However, that thought was a piece of cake when we discovered that the highway turned in a bright red dirt road at the edge of town. The bus driver didn’t want to take the bus down this dirt road since it had just rained. He cell phoned the owner of the bus company. Then our local tour guide and the owner went round and round with much hollering over the cell phone. Finally we started down this dirt road and for the second time of the trip I became quite concerned. I am used to slick muddy roads when a storm like this occurs. The bus continued along at speeds of 5 to 25 miles an hour. When the bus met other cars, it would, of course, have to get over to the side. On numerous occasions, I was sure the bus would tip over or slide off into the ditch - and there we would be for the rest of the night. Fortunately, this type of red dirt is very porous. There was no slipping or sinking in and finally after bumpy, scary ride of nearly an hour, we arrived at the next farm.

Farm Visit #6

We met the owner and he quickly showed us his soybeans and cotton because it was getting dark. Unfortunately, we spent too much time listening about chickens when we should have been on this farm. Thus, we didn’t get too see what we would have liked. Most of the group was a little irked because it was the first real farm we visited in Brazil. Little did we know that over the next 5 days we would see many more farms just like this one. And little did we know that 5 days later we would be hollering, oh my gosh, do we have to look at another soybean field!

The owner of this farm is Jose Pupin, age 50. He owns 25,000 hectares (61,775 acres). He grows cotton, soybeans, corn, wheat and cattle. He started in 1981 with 8,000 hectares (19,768 acres). He was one of the most impressive people we met.

He currently has 7,000 hectares (17,297 acres) of cotton; 8,000 hectares (19,768 acres) of soybeans; and 4,000 hectares (9,884 acres) of double crop soybeans.

He has about 100 full time employees and 15 part time. Salary ranges from lowest of about $250 U.S. to $500 per month. The average is about $350 U.S. per month. Most of the workers live on the farm. The married are furnished housing and the singles live in a dormitory. A farm cafeteria feeds the employees, and the housing and food are a part of the benefits over and above the salary. A school bus picks up the kids and takes them to a school about 3 miles away.

The price of land is about $1,200 per hectare ($485 per acre) in this area. Some land may get as high as $3,000 per hectare ($1,214 per acre). He said he is able to buy raw land for about $350 per hectare ($141 per acre) and then it costs about $500 per hectare ($202) to put it into production. When he buys land, he typically contracts with the seller for 6 years. The contract stipulates that he pay the seller a certain amount of kilograms of soybeans per year delivered to Campo Verde. Thus, when the price of soybeans goes down, the ultimate cost of the land purchase is lower or conversely higher when soybean prices rise. He says not all sellers are willing to do this and that some want cash only. He said 3,000 hectares (7,400 acres) is a very easy size property to farm in this area. He said the average size of property owned in the area is 500 hectares (1,235 acres) and much of the smaller tracts are leased to larger farmers.

Mr. Jose Pupin, the owner, is usually on the farm two days per week, and he lives in Cuiaba. He has a mechanical engineering degree and also a business degree. He said he lived in Indiana for 6 months studying U.S. agriculture and business. His father owns a farm near the Parana River and his brother farms that property.

He has a full time manager in charge of agronomy. This man has 5 people reporting to him. The owner is at the farm each Monday to sign checks and to go over various items with the agronomy manager.

All of their crop acreage is no-till. Rotations vary but most are cotton-soybean-corn. Soybean varieties are 110 to 145 days maturity. No Roundup is permitted. He uses lots of herbicides. He uses 2-4D for burn-down. He also uses Cobra, Classic and Septer, to name a few. Again, he said the chemicals are about half the cost of U.S. He said he gets 60-bushel soybeans yields. He uses Staple herbicide on cotton and the price is about half U.S.

He uses about 20% of his own soybean seed and buys about 80% foundation seed. He researches the companies and uses Pioneer, Aventis and Novartis.

He is building a 22,000 tons warehouse for fertilizer storage. He soil tests and applies lime when needed. He prefers pH of 6.2. They also do some leaf tissue analysis. They use micronutrients and sulfur in addition to phosphorus and potash. (not sure about the # on fertilizer, this was one of the translation problems).

They have cyst nematodes and he grows resistant varieties. He grows corn only for 2nd crop in the rotation because yields are only 5,000 to 6,000 kilograms (80 to 95 bushels per acre).

He has a gin on the farm with capacity of 15,000 hectares (37,065 acres). Since he has only 7,000 hectares, he also does custom ginning.

He has 7,000 hectares (17,297 acres) of pasture with 5,000 heads on the pasture.

As it became too dark to see the fields, we boarded the bus and went to the building headquarters. Unfortunately, it was too dark to really see the site. However he turned the lights on in the machine shed. The shed was open on all sides with the roof held up with concrete arch pillars. The building was at about 500 feet long and 100 to 150 wide. He had 21 combines and 9 cotton pickers in it. He also had a number of tractors and planters stored. Most of the equipment was John Deere and New Holland combines and Case-IHC cotton pickers. The tractors were John Deere. Planters were SLS-John Deere-11 row with 45 centimeters width (17.7 inches).

Marketing: He stores much of his soybean crop on the farm. He sells and contracts his crop through one company broker. His soybeans are trucked 2000 kilometers (1,243 miles) to the Port of Paranagua.

We stopped at the farm cafeteria for refreshments and fruit. We boarded the bus about 9-p.m. Saturday night, for the long, bumpy 25-mile ride back to Campo Verde. We checked into the hotel about 11 p.m. after a very long day.

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