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The Farm CPA

RSS By: Paul Neiffer, Top Producer

Paul is now part of the fourth generation in America that is involved in farming and hopes the next generation will be involved also. Through his blog he provides analysis and insight to farmer tax questions.

Top Farmer, Day 2 - Last Session

Jul 10, 2013

The final session of the day was presented by Marcos Fava Neves of the University of Sao Paulo, Brazil on the Brazilian Agriculture Perspective.

Marcos is based near Sao Paulo which does not have much soybean or corn production in the area.  Rather, they are in the heart of sugar cane country and Ethanol plants.  Marcos has published a book called "The Future of the Food Business" which has been published in English and Chinese.

An interesting slide of China imports shows about $30 billion of grains and about $55 of total agriculture imports.  this is up from $5 billion 10 years ago or an 11 fold increase.

He predicts that we will be talking about India 5 years from now instead of China.  Their current population growth is out of control.  In 15 years they will add the current population of the United States.  They will pass up China in population soon.

There was another graph showing the GDP growth rate over the next 40 years.  Surprisingly, the highest average growth country will be Nigeria at about 6% per year.  China is at 4.5%, while Brazil is a little bit lower (but importantly to Marcos, it is higher than Argentina).

The largest importers of Ag products currently is Africa, not China or Asia.

About 40% of Brazil's exports are Ag based.  Grain production is about 185 million tons up from about 100 million tons 10 years ago.  Ag is about the only thing performing real.

Soybean exports are about $26 billion, meat at $16 billion, sugarcane at $15 billion, while corn is about $5 billion, however, this is a 100% increase over the previous year.  Total Ag exports are about $100 billion.

Europe and US represent 34% of the imports purchased down from over 60% ten years ago.

There are three types of farm operations in the country now.  The traditional farmer owns and operates the farms.  The second type owns, farms and then processes the land.  The last group coordinates the input process with a farmer or a simply a manager of the farming process.

SLC Agricola Business is publicly traded and farms about 750,000 acres and soon will be at 1,000,000 acres.  Their production is better than US averages by about 10% for this company.

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