27,668-Acre Brazilian Farming Operation Para, Brazil
- 27,668 Acres
The Para, Brazil Farmland consists of two sections totaling 27,668 acres has all permits in place – including GPS title – plus infrastructure comprised of roads and electricity. The property is located between the municipalities near to Maraba and Para, Brazil, an area known for excellent weather, soils, and topography for cattle. No winters and harsh cold weather allows for production year-around, providing consistent operations. The vegetation of the area was traditionally forest area. The property consists of 9,000 acres of cattle pasture, with barbwire fencing in place, the remaining 18,668 acres is hardwood forestland.
Brazil is clearly an agriculture powerhouse and its role in global trade will continue to expand. The Brazilian government is committed to developing infrastructure in the emerging agricultural regions, particularly in rural regions that face high unemployment, and strongly supports export oriented growth. While the Brazilian government is cautious and protective on issues related to large-scale foreign land ownership (i.e. land grabs by sovereign funds), it supports foreign investment aimed at improving production and infrastructure, especially in northern Brazil. The property manager, in place to take over the operation for a buyer, a Brazilian company owned by an American/Brazilian resident, will be local partner of the operation, to accommodate the foreign ownership law.
Para is strategically located near two ports and is close to major local markets (Belem, Para, and Sao Luiz, Maranhao). It will prove to have a significant economic advantage for exports and receiving inputs as trains and roads expand in the region. The region of Maraba is known for their excellent soils, and topography that works great for cattle ranching. Close proximity to local markets means that everything grown on the property can be sold locally at the auction.
The region offers excellent rainfall and temperature to support ranchland and timber production. Rainfall is about 60 inches per year (1500 mm).
The climate of the region of the asset is tropical with dry season, with greater rainfall between December and May and a dry season between June and December. The winter average temperature varies from 70 °F to 85°F, and in the summer it varies from 70 °F to 95 °F.
The region of the asset, has six miles of river frontage, enough for a barge, however a barge is cost-prohibitive compared to the asphalt road that goes straight up to the front gate, allowing cattle to move by truck. The river is full of fish, making it great for fishing. The land is predominately flat, however about 30% has rolling undulations, and some gullies where streams are located.
Para state is considered to have significant upside, it has a strong local market providing significant economic advantage for exports and receiving inputs. This particular region of Brazil is known for excellent weather, soils and topography. Land prices in the area are still significantly lower compared to southern Brazil. This suggests potential for land value appreciation as this region catches up with prices in other regions.
Recently, Brazil has been rocked by social unrest and political scandal. Combined with relatively high interest rates and declining oil prices globally, Brazil has also been experiencing lackluster economic growth. Due to the current economic turmoil, potentially high-value assets and opportunities are under priced given the steep depreciation of the Brazilian Real, particularly in terms of the US Dollar.
While the Brazilian government is cautious and protective about issues related to large scale foreign land ownership (i.e., land grabs by sovereign funds), it supports foreign investment aimed at improving production and infrastructure, especially in the new frontiers such as the state of Para. The Brazilian government is committed to developing infrastructure and jobs in the agriculture and timber sector.
In the long term, Brazil will remain Latin America’s largest economy and a prime geography for business. There will undoubtedly be more discord to come, but investors should not underestimate the resilience of what often is referred to as the "country of the future" making now the time to invest in Brazil.
• Main timber and agriculture production regions have good temperatures and plenty sunshine (average temperature: 77 degrees, annual rainfall: 51 inches). The property gets over 60 inches per year and is in a region that traditionally has more than 60 inches of rain per year.
• No winters allow year-around operations, tree growth and pasture land growth, providing ideal cattle and timber conditions.
• Brazil has the largest poultry industry in the world, and a strong beef and pork industry, favoring domestic demand.
• Infrastructure including highways, roads, electricity & close to ports
• American/Brazilian farm manager and human resources on-site with excellent credentials.
• All permits are in place including GPS title
• Potential for additional land development, the American manager in place to property manage and administer the property has a development plan to expand pine plantations and up-grade ranch area, and gain irrigation permits for areas suitable for row crops.
• Current Real/Dollar exchange rate is 3.5 Real per dollar. This represents a 50% discount for US dollar denominated investors since early 2012
Price includes land purchase as well as:
• Stocking the farm with 4,000 head of cattle
• Management Plan
• Upgrading pasture, sub-soiling, reseeding, areas where needed
• Adding barb-wire fence to create smaller enclosures for cattle, of 50 and 100 acres
• Some existing equipment and the purchase of additional equipment
• Closing Costs and Closing Taxes, Property Taxes, Fees for local Farmers Association
• Property Keepers and 33 person staff salaries
• Plow up 200 acre of row-crop, where possible on the property, for the production of feed
• Permitting expenses of the hardwood forest land for sustainable wood extraction
• Management, operational, and administration included for ten years
A Brazilian company owned and operated by an Experienced American expert in Brazilian property management, office is 30 minutes down the road from the property, and he is in place to step in as transitional property manager and administrator for a minimum of 5 years or indefinitely.
Potential for additional land development, and expansion. The American manager is in place has developed a property management plan to bring the farm up to 0.89 head of cattle per acre, which is at par with the other high yield farms in the region.
Co-listed with Michael Greene of Brazil Property Group.
Broker: Linda Niebur