My friend Kory Melby lives in Brazil's Center-West, the country's agricultural heartland.He has been showing foreigners around the region for a number of years, looking for good deals in farmland. He offers "private consulting services for hedge funds and private investors, keeping them abreast of the latest Brazilian updates on soybeans, cotton, cattle and land prices".
Here’s one of his most recent posts:
March 14, 2009
Back in Goiania (capital of Goias state).
I covered 2000+ km of Mato Grosso (state) last week.
2nd crop corn and cotton look good.
Rainfall totals for central Mato Grosso are at 1400 mm as of March 14th. Normal is 2000 mm for this date.
The rainy season will end by the end of April. Normal rainfall amounts are 2200-2400 mm for the season.
As long as rains come for another 6 weeks, the 2nd corn crop should be fine. If rains end early, then yield problems will show up.
Soybean yields were as expected for most producers: 50 sacs or 44.5 bushel per acre.
Cash price for soybeans are about US$ 7.00 per bushel basis central Mato Grosso.
Everyone is in survival mode. They know they are not going to make much money this year. They know it will be tough sledding into 2010. Credit is expensive. All banks want 2% per month or more. One producer said he made his payments to the bank, and now the bank does not want to lend the money back out again.
Local coops are offering 2010 soybean packages for 22 sacs of soybeans per hectare for trading. This includes fertilizer, seed, and chemicals. This is not too bad.
Read the rest of his analysis here.
He also provides a translation of an article that just came out in Gazeta Mercantil, titled, “Land Prices Surprise with Full Recovery in Crisis” (Gazeta Mercantil is the Brazilian equivalent of The Wall Street Journal – minus the Murdoch stigma).
