Agrimoney.com | 21 October 2011
SLC Agricola has bought its second farm in Brazil's Piaui state in less than two months, expanding into a relatively undeveloped area where land prices are a fraction of those in more popular regions.
The farm operator paid R$47.3m ($26.6m) for 12,900 hectares of land, taking its total portfolio of Brazilian land above 262,000 hectares.
The purchase calculates at R$3,659 ($2,057) a hectare, below the R$4,965 a hectare SLC Agricola paid last month for 13,800 hectares within the same state, although the latest farm, named Parceiro, is "totally undeveloped", consisting of native cerrado land.
The last acquisition included silos and 3,700 hectares of already-broken land.
The price is also considerably below prices paid in more popular agricultural areas of Brazil, boasting better infrastructure.
Deloitte Touche Tohmatsu in May valued SLC Agricola farms, most of which are in central or eastern parts of Brazil, at an average of R$7,875 a hectare, with one pegged at R$15,700 a hectare.
New frontier
Indeed, Piaui, in north eastern Brazil, is one of the country's poorest states, and has been one of the least developed agriculturally, despite being reckoned as suitable for soybeans.
Bunge, the US agribusiness giant, eight years ago built a soybean crushing plant in Urucui, in the south of the state.
Kory Melby, the Brazil-based farm consultant, quotes estimates that only 12% of potential farmland, of some 3m hectares, has been "explored", although acreages are rising fast.
However, the state has grown in popularity thanks to its ample rains and its distance from the Amazon region, and its tight constraints on agricultural development.
Indeed, with Bahia, Maranhao and Tocantins, Piaui is part of the north-eastern agricultural frontier which is gaining popularity under the acronym "Mapitoba", formed from the first two letters of each of the state's names.
Even in Piaui, SLC Agricola will be bound by conservation laws to set substantial amounts of land aside as ecological reserve.
SLC Agricola shares stood 0.8% higher at R$15.58 in afternoon deals in Sao Paulo.
SLC Agricola has bought its second farm in Brazil's Piaui state in less than two months, expanding into a relatively undeveloped area where land prices are a fraction of those in more popular regions.
The farm operator paid R$47.3m ($26.6m) for 12,900 hectares of land, taking its total portfolio of Brazilian land above 262,000 hectares.
The purchase calculates at R$3,659 ($2,057) a hectare, below the R$4,965 a hectare SLC Agricola paid last month for 13,800 hectares within the same state, although the latest farm, named Parceiro, is "totally undeveloped", consisting of native cerrado land.
The last acquisition included silos and 3,700 hectares of already-broken land.
The price is also considerably below prices paid in more popular agricultural areas of Brazil, boasting better infrastructure.
Deloitte Touche Tohmatsu in May valued SLC Agricola farms, most of which are in central or eastern parts of Brazil, at an average of R$7,875 a hectare, with one pegged at R$15,700 a hectare.
New frontier
Indeed, Piaui, in north eastern Brazil, is one of the country's poorest states, and has been one of the least developed agriculturally, despite being reckoned as suitable for soybeans.
Bunge, the US agribusiness giant, eight years ago built a soybean crushing plant in Urucui, in the south of the state.
Kory Melby, the Brazil-based farm consultant, quotes estimates that only 12% of potential farmland, of some 3m hectares, has been "explored", although acreages are rising fast.
However, the state has grown in popularity thanks to its ample rains and its distance from the Amazon region, and its tight constraints on agricultural development.
Indeed, with Bahia, Maranhao and Tocantins, Piaui is part of the north-eastern agricultural frontier which is gaining popularity under the acronym "Mapitoba", formed from the first two letters of each of the state's names.
Even in Piaui, SLC Agricola will be bound by conservation laws to set substantial amounts of land aside as ecological reserve.
SLC Agricola shares stood 0.8% higher at R$15.58 in afternoon deals in Sao Paulo.
