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I am back from a 2 week infrastructure tour with the owner of a
hedge fund from Dallas, TX.
The tour went very well. I always love to hear tour participant
reactions to the level of development that has taken place in the
interior of Brazil. Our tour focused around the states of Bahia and
Mato Grosso along with professional visits in São Paulo. It had been
three years since I had personally been back to Bahia. I have many
friends there that have kept me in the loop on ag activities in the
area. I was very impressed at how much
LEM, Bahia
had grown. We stayed at
the Saint Louis hotel. I was very impressed by the accommodations.
The only frustration I had in LEM was the slow internet connection
during the day. Early in the morning or later in the evening the
connection was good. In Mato Grosso all the hotels have Wi-Fi.
I have my clients stay in Wi-Fi internet access hotels. This is an
unexpected perk for businessman with their laptops. Another
surprise to most clients is that their American cell phones work in
Brazil. Clients tend to enjoy text messaging while driving around
looking at projects. While in Bahia we looked at land clearing
projects, soy and cotton farms and a new project for the area called
Jatropha. Jatropha has been in the media
lately as an oil crop that might be a better option for making
bio-diesel. I have been researching this crop and will comment more
when I have a better understanding. It sure seems to be a viable
alternative crop for land that is more marginal and tends to have
less rainfall. We flew into and out of
Barreiras, Bahia. The flight
is 1 hour and 15 minutes from Brasilia.
It is a beautiful flight that flies over the edge of the
escarpment and directly over some of the American producers
that we hear about in the media. I highly recommend this flight for
future visitors to
Western Bahia. The region is perfect for cotton. I think the planted area to cotton will grow again by 10% this
next crop year.
We continued our tour via a flight to
Cuiabá, Mato Grosso. The
following morning we started our adventure north to the city of
Lucas do Rio Verde. It takes about 5 hours to
drive there. I recommend all 1st timers to Mato Grosso to
endure the trek north to the soybean frontier. I think the drive
adds perspective to the vastness of the area. The F-250 FORD crew
cab diesel pickup truck I normally rent was undergoing maintenance.
They decided to give me a new Toyota Land Cruiser SUV. It was jet
black. The vehicle had a sale tag on it for R$200,000 or US$100,000. I felt like we were Saudi Arabian royalty. The irony of my
previous statement is that once we made it to Lucas and checked into
our hotel with Wi-Fi high speed internet access, I looked to the
horizon and saw rows of new storage tanks and the newly constructed
Bio-Diesel plant, which is the largest in Brazil. The
following day we had a VIP tour of the facility. It was German
designed. I was very impressed. The quality of construction and
materials were first class all the way through. There were dozens of
super tanks around the edges of the facility. The same size tanks we
see on TV when they show footage of an oil refinery in Houston, TX. When we were on catwalks on top of the facility looking down,
it
seemed like we could have been in Saudi Arabia. In any direction
there was new construction (world's largest feed mill being built by
Sadia) and all the new warehouses to store corn and
soybeans canvassed the landscape. This had all been built since I
was there at the end of April 2007. I was in shock at all of the
progress.
For those that read my
Blog
and my newsletters know my obsession
with Lucas do Rio Verde, Mato Grosso. It seems like every 90-120
days the city doubles in size. There is no other AG BOOM town like
it on the whole planet. The level of planning, government
cooperation with private industry, administration and implementation
is 2nd to no one in the whole world in my opinion. The amount of
progress made here in this small farm town in the last year from the
depths of the farm crisis to today is astounding. This community
should be used as a blue print for development and cooperation by
governments and private investment in other communities around the
world. While doing all of this they are obeying environmental laws
and workers rights as well as raising the standard of living for all
those in the region. This area is truly going to be known around the
world in the future as one of the best success stories in global ag
production in history. From soybeans, corn, cotton to pork bellys,
chicken nuggets and BIO-DIESEL.
I decided to take my clients out to a local farm. My friends are
busy adding more infrastructure to their farm. They have doubled the
size of their machine sheds. They have added a 200 ft radio antenna
to their farm. They have now installed high speed internet on the
farm. They are also restructuring how they store their parts for
equipment and chemicals they use for soybeans and cotton. The farm
will now have its own parts store and chemical store. This will help
track where parts and chemicals are going. This will help
reduce the threat of theft and slippage. The farm is split into
different management segments. Each farm manager carries a radio
with 7 channels on it. Each channel is designated to a given
enterprise. For example: channel 1 is cattle, ch2 is crops, ch 3 is
hog farrowing, ch4 is feeder pigs, ch 5 is private for only managers
,ch 6 is for management to speak to the office in town, channel 7 is for
the owners of the farm. I thought the level of sophistication is 2nd
to none in the whole world. So many people from North America think
that Brazil is lacking in technology. In some areas this remains
true. However, the best managers are applying modern day technology
as quickly as they can. The farm and the office in town are now
using SKYPE to call one another. Skype is changing how everyone
communicates. Why not? Its free.
The Mato Grosso part of the tour ended with a 1 hour and 15 minute
flight from
Sinop to
Cuiabá. The option makes it so easy to connect
with commercial jets that fly directly into São Paulo international
airport.
I am hearing that a meeting is taking place to define the Amazon
Biome. There has been much disagreement the past three years. It sounds
like players such as Maggi, Greenpeace, ADM, Bunge, Cargill,
academia, and Federal officials are all involved. If an agreement
can be reached so all sides can agree and those producers that are
affected can be compensated for lost production potential on their
lands, we will then have a better handle on how and where Brazil can
expand soybean areas. While this issue remains undefined, no one has
the courage to clear any more land in the transitional rain forest
areas. |
