21 March 2010

Abundant. Affordable. Amazing.

Yes - that's the theme for Ag Day 2010. Let's start off with some quick trivia. Did you know that 1 Farmer feeds 144 people. Not kidding. That in itself is Amazing.

My mom and I generally spend our Saturday's running errands. We always start with breakfast. It's become our little tradition (as long as I'm not traveling over a weekend) we head to breakfast on Saturday morning and then run our errands for the week. It's a nice way to spend some quality time with my momma. Especially since I don't get to see her too often during the week. Yesterday - we started our morning with a trip to Lewistown. See, two of our County Farm Bureau's put on a Farmer Share of the Food Dollar Breakfast. We started at Fulton County Farm Bureau and decided to work our way back. This is how we were greeted when we pulled into the Farm Bureau Building:

I think it's a great visual for the fact that we think about constantly. Back to the breakfast.. They were serving eggs, sausage gravy & biscuits, bacon, toast and pancakes. Total cost for two people: $1.18. Yep. Out of all of those items that were served the farmer only receives $.59. It's jaw dropping to say the least. The breakfasts are always well publicized and brings a lot of attention to the consumer about the food they purchase. After all, if we're not telling our story who will? Well.. I'm sure plenty of folks out there want to tell our story - it's just not the correct version. So our morning continued.. we headed back to Peoria for the Peoria County Farm Bureau's Farmer Share of the Dollar Breakfast. We met Courtney and her parents there for breakfast. A little more expensive in Peoria.. but a modest $.60 for (2) Pancakes, (2) 2 oz whole hog sausage patties, (2) scrambled eggs, OJ and Milk. It was mighty tasty, too. But around 9am I heard rumblings that they had already served well over 800 people and the line was all the way out the door.

I think the breakfasts' allowed for a few things... People to get an awesome meal for a great deal and for folks involved in agriculture to use an avenue that we all love (food) to educate consumers about the pathway their food takes. Education comes from many different forms. One of my favorite is the shock value of the WTF shirts. They are a conversation starter in one of my favorite forms... Pictured rockin her WTF shirt is my friend Janice (she has a great blog.. click HERE to read it). Lookin good Janice! (I hope you don't mind me snagging it from your blog... I just couldn't pass up on using it).

How did you celebrate National Ag Day? Whether it was simply purchasing groceries at the store. Buying dinner. Eating a steak (we'll address the Michigan Governor in another post...). Or rocking your awesome WTF shirt. It doesn't matter. Take pride in your tie to agriculture. Remember - if you eat you're involved.

So, take a minute.. Tell a farmer "Thanks". Listen to their story. Because that field to the fork trip is an amazing story... And one that should be told correctly. I love hearing it. I love watching it being told. Especially when it's told by the people that provide the food for us.

Happy National Ag Day. From our field... to your fork.

03 March 2010

Well Hello.. Argentina.

Today was an adventure of a different sort. We departed the hotel around 7:30 this morning and headed down the mountain towards the water. Our day was one we all had been greatly anticipating. The official start to the morning began on a riding bus tour of the Mosiac FACILITY in Cuatao. Before we arrived to Cuatao we had to wind down the mountain side to the facility. It would be unjust for me not to mention what a beautiful site it is. It is amazing to see how the road twists and turns and winds itself down the side of the mountain at great heights above anything you could imagine. We have talked a lot this past week about the lack of infrastructure in Brazil. What the state of Mato Grosso lacks in road development, Sao Paulo state makes up for in their creativity and the dynamics of the roads down the mountain side.

The bus tour through Mosaic’s facility was full of information. The plant in Cuatao opened in the 1970’s and now employs 400 to 500 people, in which at least 300 of them are actual Mosaic employees. The rest are contract workers. Most of the movement done to move product to and from the facility is done so by trucks. That consists of about 700,000 tons per year of SSP, alone. The facility also blends approximately 300,000 tons a year and moves on average 200 trucks per day. Because of the location – the plant in Cuatao only trucks product to and from the field in Sao Paulo State. Mosaic not only provides fertilizer for crops, they also process about 100,000 tons of animal feed a year. Currently, the Mosaic facility has gone seven years without an accident. When we talk about the beauty of the mountain side it really refers to the tropical wooded area. Mosaic mentioned that thirty years ago the mountain side was barren and they, along with several other companies, planted the trees to make a positive improvement on the environment. Now, the mountain side has an abundance of trees that are full of rich green foliage.

We left the Mosaic facility and headed down to Cargill’s location in Guaruja. Getting into the facility seemed to be our most difficult task of the morning. As we moved down the highway – we saw miles and miles and miles of trucks – filled with soybeans waiting to unload. Cargill is currently running four shifts 24 hours a day, nearly 365 days a year (with the exception of Christmas and New Years). At any given time there are three shifts working around the clock while one shift rests. The trucks travel anywhere from 200 to 2,000 km and it take them approximately two days depending on their distance from Guaruja. The trucks can wait in line anywhere from twelve to eighteen hours to unload their vehicles. After our briefing we took a walking tour of the facility. We were shown the mounds of soybeans in the storage warehouses. On site storage is broken into two warehouses; one that holds 30,000 tons and another with a capacity of 60,000 tons for a total of 90,000 tons of soybean storage on site. On a normal day they can load about 2,000 tons/hour and unload around 23,000 tons/day. The Guaruja location assists in loading approximately 150 vessels a year (that includes handy size, panamax and cape size vessels). The facility also holds approximately 110,000 tons of bulk sugar on site. Following our walking tour we headed down to the docks where we loaded a couple of tour boats and took a tour of the harbor. It allowed us a sea level view of the harbor, the container loading and unloading, and the vessels.

We wrapped up with an early afternoon and headed back to Sao Paulo. From there we jumped on a very short international flight to Buenos Aires where we’ll stay until we head home on Saturday evening.

All in all a great day!

02 March 2010

More info than you can shake a stick...

Today was a very informative day. We were in sessions all day that contained a breadth of information. We started our day with a briefing from the CME/BM&F. BM&F is a vertically integrated multi-action class exchange. The CME in Brazil trades about 200,000 contracts per day and are currently working with BM&F to create a new exchange. Brazil ahs moved away from open cry pits and are now fully electronic. BM&F – the third largest exchange in the world and the largest in Latin America has implemented strategic actions to enhance agri-business competiveness.

Marco Antonio Siveste Leite of BNDES (Banco Nacion de Desenvestment Economical e Social) took time to discuss the new programs that are being developed. Since BNDES’ mission is to finance small and medium sized companies they feel working with agriculture is a good fit for them. One interesting comment was that BNDES gives preferential treatment to loans being sought for Brazilian manufacture equipment (at least 60 percent need to be manufactured in Brazil).

Tome White, US Consulate General in Brazil provided me with our fun facts for this Wednesday:

• Sao Paulo state contributes to a third of the Brazilian Gross Domestic Product.
• Brazil houses the Largest Japanese population (outside Japan)
• They have the 3rd largest Italian population
• The 3rd largest Lebanese population
• The largest German industrial population in the world (yes – that even includes Germany)
• Sao Paulo’s population is 11 million within the city limits and 18 million around the city limits.

Our afternoon session kicked off with Domingo Lestra with ADM Brazil. He explored various aspects of ADM’s operations in Brazil. For example there are between 64 and 70 mmt of soybeans and about 50 percent of that is crushed for meal and oil. Amazingly, Brazil’s government established the Biodiesel program to promote social inclusion creating rural jobs and income. Now, the biodiesel market is controlled by the government which mandates the blend of biofuels in diesel. One last thing – for every penny the Real loses on the dollar it is equivalent to ten cents on the Board of Trade in Chicago.

Marius Pratini de Moraes from JBS Swift & Co shared some of JBS’ history and strategy for the future. JBS began 57 years ago with one slaughter per week in the middle of a field. The company expanded to ten slaughters a day and when Brasilia was built fifty years ago and 25,000 people needed to eat – JBS was there and took their production to another level. Today JBS is acquiring companies that are in distress and now slaughter 65,000 cows a day; 50,000 pigs per day and over 7 million chickens on a daily basis.

One of the interesting things about Brazil is the education system. Public Schools in the elementary and high school levels are pretty much part time whereas the private schools are full time (and a much higher quality education). Most of the students in the public schools do not finish their education. JBS has recognized this problem and has built a school in Sao Paulo. JBS covers all of the expenses (that is building costs, clothes, books, etc). Their request is that the parents pay a nominal registration fee of one to two dollars per registration. JBS recognized the problem and has a goal to combat the lack of education in Sao Paulo (and eventually other areas of the country).

Another day full of amazing information is in the books. Our next stop is the harbor at Santos and then off to Argentina.

01 March 2010

Ethanol, Sugar and Case IH.. Oh My!

Today was spent in Piracicaba. We start at the Luiz de Quoiroz College of Ag. They have 236 faculty members and 805 staff members total. Their driving areas of research are BioEnergy, BioTechnology and BioEconomics. We spent the majority of our day learning about sugar cane. Did you know that in the first twelve months sugar cane plants will reach four to five meters with the extractable culm measuring two to three meters? After the harvest underground buds will sprout giving rise to the new crop. The average planting of sugar cane harvest renders five to seven years of harvest. That alone is an amazing statistic.

Sugar cane is used for two things primarily: Ethanol and sugar. In fact 51.1% of cane is used for ethanol and 48.9% is used for sugar. Brazil has actually displaced 50% of their gasoline consumption by using ethanol. ELSAQ (which is very similar to our University of Illinois College of ACES) has a long history of research dating back to the 1920’s. The United States and Brazil account for 90% of the world’s ethanol production. However the statistics are almost shocking – the US only consumes 2 to 3 percent of ethanol for transportation while Brazil uses 40 percent. Keep in mind they also have a 25 percent blend mandate from their government.

The processing of sugar cane ethanol seems to be very similar to the crush process of soybeans. The crush of sugar cane yields 85 percent liquid and 15 percent bagasse (or the pulp). From there the sugar cane juice is reduced to 40 percent from the original 85 percent. At that 40 percent – the liquid becomes molasses and can either be turned into sugar or ethanol.

That pretty much takes us up to the production part but it all has to get there somehow, right? Right. We spent our afternoon at the Case IH facility in Piracicaba. They produce four sugar cane harvesters per day. All assembled and inspected by hand. There is no robotic assembly in the plant. Case IH produced their first sugar cane harvester in 1997 and now account for 52.2 percent of the market share.

Some other items of interest pointed out today: Only 60 percent of the harvest is mechanized in South America. That leaves 40 percent done by hand. However world wide – that number is even more shocking… 80 percent of cane harvest is still done by hand. Case IH mentioned one of their goals was to have 95 percent of areas with a slope under 12 percent mechanically harvested by the year 2021. The Sao Paulo government came back and mandated that 95 percent number be in place by 2014 and also said they wanted to see all of the acres with a slope under 12 percent mechanically harvested by 2017. Now that is an impressive goal.

It was a very busy Monday and our Tuesday is set to be just as busy. We’re headed to the CME/BMF briefing and a visit to the Brazilian ADM facility in the afternoon (just to name a few things).

Until next time…

28 February 2010

Summary of Days 4, 5 and 6

Last Friday when we had met with the various departments involved with the Brazilian Government and were preparing for our day with Governor Maggi and Colonel Maia as well as the Environmental Secretary Luis Henrique. We also had a chance to visit Amaggi Enterprises before taking a bus to Lucas do Rio Verde via BR 163. It makes our Interstate 74 look like a super highway that is absolutely no potholes and is perfectly smooth. The ride was long and tiring but the view was amazing. From the mountains and forest to soybeans and pastures it is an incredible site to see. Saturday we met with Luciane Copetti who is the local Secretary for Agriculture and Environment before heading to Fiagril which is the biodiesel mill. We met with Paulo Franz who is the owner/operator of Mano Julio farms. They are a large pork and poultry operation that hasn’t seen a negative years in all fifteen years of operation. After our long bus ride back to Cuiaba (kwee-a-bah) we had dinner with Colonel Maia at restaurant that is very similar to a Brazilian steakhouse.. only with fish. Yesterday was a travel day and today we’re headed for Piracicaba for more briefings and meetings.

On a side note – we’re headed to Buenos Aries on Wednesday. It will be interesting they registered a 6.6 earth quake following the 8.8 earthquake in Chile. There has been reports that southern Brazil and parts of Argentina felt the Chilean earthquake but when we were in Mato Grosso we did not.

We have five more days left in our South American adventure with part of the 2010 Illinois Ag Leadership Program.

Day One and Two - Feb 23 and 24

Today we are in Cuiaba, Brazil (KWEE-A-BAH). Yesterday was a morning filled with meetings and briefings with the Agricultural Ministry, the Environment and Renewables and the National Bureau of Infrastructure Support (DNIT) before hopping on a plane from Brasilia to Cuiaba. Here’s a quick overview of Brazilian Agriculture thus far. The investment in tropical agriculture technology allowed the expansion toward the center and the west of the country. Brazilians spend a lot of time and money researching how to use resources to be able to extend the soil in the tropical and subtropical climates. We’ve talked before about Brazil’s lack of infrastructure… So they utilize the central areas to ease their export. When you look at Land Use – Agriculture makes up 31.3% of it. With 20.2% Pastures, 6.8% annual crops, 1.7% permanent crops and 2.5% planted forest. The folks with the Agricultural Department were quick to point out Brazilian Agriculture doesn’t rely on public support.. However their business is run on 33% personal investment, 33% rural credit and 33% government loans that are to be paid back within a year.

Yesterday we also learned about EMBRAPA which is similar to our USDA ARS. They were established in 1973 and employ 8.400. Of that 8,400: 2,210 are scientist… 1,650 are PhD’s and they operate on a $650 million budget. That also includes 39 research centers and two labs abroad.

They said their goals are to:
1) Increase rural credit
2) Support commercialization
3) Enhance rural
4) Strengthening the middle size grower
5) Strengthing the cooperatives
6) Encourage the sustainable development of ag and recovery of grasslands.

The Brazilian environmental law is extensive.. For example to take care of the forests, every railroad property is required to keep up the natual habitat. When farmer purchased ground in 60’s they were able to clear and farm 80% of the ground and keep 20% in its natural state. However in today’s times.. They keep 80% of the ground in its natural state and are allowed to farm 20%. If producers don’t follow these regulations they are often times confronted with military enforcement and sentenced to jail time or ordered to pay fines.

Infrastructure is a hot topic from the United States all the way to Brazil. The main purpose of DNIT is to take care of the highways and railways and waterways. BR163 is the main highway to go to other states and other countries. They budget roughly $3.5B Real for infrastructure with 30% of that going to new projects.

There is a ton of information and this just scratches the surface. We’re headed to meet with the Assistant Governor and the Enviromenmental Secretary before heading to Lucas do Rio Verde tomorrow afternoon.

23 February 2010

Let's take this show...

On the road. Which is exactly what we plan to do over the next two weeks. I'm headed to Brazil and Argentina with the Illinois Ag Leadership Program.

Our plane departs at 9pm tonight from Chicago. I am hoping to write and post pictures nearly every day so make sure you check back for updates. I will be working a little bit while we're traveling so major thank yous to Christina Wilkinson, Ryan Voorhees, Keith Worner, Courtney Lynne and Mike Sabol who are all helping out while I'm gone.

I return midday on the 7th of March. I can't wait to see all the fun and exciting things South America has to offer.

I am very sad to be missing Commodities Classic this year - so everyone will have to keep me posted as to what is going on in Anaheim! I will miss all of you terribly!

...Until next time.