It is my turn to weigh in on the debate surrounding the Amazon fires in Brazil. It is not my intent to minimize the importance of the Amazon, but much of the media coverage is overkill. Yes, there are fires in the Amazon. No, that is not a good thing. There are fires every year, […]
LUÍS EDUARDO MAGALHÃES, Brazil, March 20 (Reuters) – Brazilian farmers, who are expected to harvest another record soy crop thanks to good weather this year, are placing an unprecedented emphasis on maximizing yields, said André Pessoa, founding partner of consultancy Agroconsult. This stance, which ends up reducing use of deforested areas for farming, is being exacerbated by problems in drought-stricken Argentina, where a portion of the crop will be lost, raising international soy prices and potentially capitalizing farmers.
Credit risk rating agency Moody’s said China’s investments in Latin America should continue to expand in the coming years due to the high quality of raw materials, infrastructure needs, and favorable demographic trends in the region. From 2003 to 2016, Chinese investment totaled US$ 110 billion.
Reconciling Environmental Preservation with Agriculture Development
a white paper by Matthew Kruse, CEO of Genesis Investimentos
I grew up on my family’s farm surrounding Royal, Iowa, nearly 200 miles northwest of Des Moines. Royal is your typical farm community, boasting a population of less than 500 people. I am proud to be a 5th generation…
Following the election of Brazil’s new President, Jair Bolsonaro, the overall change of government has been viewed with optimism. Key economic factors are beginning to look promising as long awaited fiscal reforms begin to take shape. Rabobank is projecting 2.2% GDP growth for Brazil in 2019 vs an estimated 1.3% for 2018. Both inflation and interest rates are expected to remain stable or will decline. In the case of interest rates, they have declined to 6.5%, the lowest level ever recorded. While a steady recovery will help boost certain agribusiness industries like corn and beef, other industries remain tied to trade war issues such as soybeans, cotton and sugar.
The next crop of soybeans and corn has been planted in Brazil. My wife’s family finished just last week. They typically like to get everything in by December 1st, but with heavy rains it pushed the planting window back a week. Other areas like the Mato Grosso were ahead of schedule, beating their five-year planting average by several days or more. This would indicate that Brazil’s crop prospects are firing on all cylinders. The sooner the crop gets in, the better odds they have of producing a bumper crop. Ag consultants are already busy putting together crop estimates.
They used to say in the South that “Cotton is King”. Much of the early development of the Southern agriculture states was due to cotton. It dominated US trade in the 19th century. As settlers moved further west, land was bought and sold to wealthy plantation owners seeking to grow more cotton. While cotton has seen its share of ups and downs, soybeans have gotten most of the attention in the pending trade wars. Many may not be aware, that domestic cotton production is even more dependent upon exports than soybeans. While over 50% of our soybeans went to export, almost 75% of our cotton went to export…mainly to China. Much like the soybean market, the trade wars have begun eroding the US cotton export dominance as other countries like Brazil seek to fill the void.
Brookfield Asset Management Inc. is pretty pleased with the political shift in Latin America’s largest economy, underscoring the potential for a Brazilian private equity boom under the right-wing administration of Jair Bolsonaro. The Toronto-based alternative asset manager has a lot on the line in Brazil.
Brazil elected a new President yesterday. His name is Jair Bolsonaro. He won easily by winning 55% of the votes. While the election was not close, the rhetoric during the campaign seemed to mimic that of our most recent American Presidential election.
As the old saying goes, history does not repeat itself, but it rhymes. Brazil finds itself in a similar situation to that of October of 2002. It was then that Brazil elected President Luiz Inacio Lula da Silva. “Lula” was seen as a left-wing candidate, unfriendly to Brazil’s free market. These fears weakened its currency, the Real, to what was a record low at the time. Hindsight is 20/20, and we now know those fears were unfounded. In the decade to follow, Brazil paid down much of its international debt, and their currency began to strengthen.