CHICAGO – Canadian farms are getting larger every year, but they’ve got a long way to go to catch up to some of the mammoth operations in Brazil.
Aurelio Pavinato, chief operating officer of SLC Agricola, told growers attending DTN’s Ag Summit that the company he helps manage farms 617,500 acres of cotton, soybean and corn.
It is not even the biggest farm in the country – two other operations plant more acres – but SLC Agricola has aggressive growth plans.
“We intend to increase our planted area 12 percent per year,” said Pavinato.
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The breakdown of planted area on the farm is 47 percent soybeans, 38 percent cotton, 13 percent corn and two percent wheat and other crops.
Cotton is the biggest contributor to the bottom line, generating 62 percent of the company’s revenues, followed by soybeans at 26 percent and corn at 10 percent.
SLC Agricola has split the business into 13 farms, which are all located in the Cerrado region of Brazil. The farms range in size from 25,488 to 76,639 acres.
Pavinato said there are significant economies of scale in running a big agribusiness company, including reduced production costs for chemicals, fertilizer and farm equipment.
“We can use the biggest machinery in the world and the best machinery in the world,” he said.
“One employee can do more.”
That is an important consideration for a company that has 1,781 full-time and 1,442 temporary staff.
SLC Agricola’s ability to use the latest technology has helped it exceed the average soybean, corn and cotton yields produced by American farmers.
Pavinato said other grain exporters should prepare themselves for stiff competition from Brazil in the coming years because of increasing yields and the ability to bring more land into production.
Brazil was responsible for one percent of world food exports in 1980, but by 2010 it was the world’s second largest exporter, accounting for 16 percent of exports.
That’s still less than the United States’ 42 percent, but the United Nations’ Food and Agriculture Organization anticipates Brazil will top the U.S. as the world’s leading food exporter by 2020, with 38 percent of sales to the U.S.’s 32 percent.
The amount of unused land that can be brought into production is one of the major reasons for the surge. Brazil has 178 million acres of cultivated land and another 175 million acres that is available for agricultural use.
Pavinato expects to see an additional 2.5 million acres under cultivation in Brazil every year for the foreseeable future, but the rate of growth could easily be higher if commodity prices are attractive. The country has 425 million acres of pasture land that could be converted to growing crops.
The World Bank estimates Brazil has 54.6 million acres that could be used to expand soybean production alone.
“We have a big potential to increase our planted area,” said Pavinato. “We’ll be stronger in the future.”
