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January 14 -26, 2009
Sao Palo is the third largest city in the world. 19 million people. My pragmatist mind pondered as follows: How much water do 19 million people use is a day? How much garbage do the produce? Where does it go? How do you possibly keep order in a city like that? Most big cities I have seen have a “downtown” section, where the tall buildings are. In Sao Paulo, the high rises go on further than can be seen. Saw a lot of Graffiti in the poorer sections of the city, Renata said it was gang related. Big cities probably have more in common around the world than they do different. Dined at the Figueira Rubayat, which is a famous old restaurant with a huge fig tree growing out of the middle of the dining room. Grass fed Brazilian steak tender, but not very flavorful. (Meat got tougher the further out we went, some inedible) Fun to see the lights of Sao Palo from our high rise hotel room. Day 2 – January 16 – Sao Palo to Campo Grande Flew early to the city of Campo Grande, capital of the state of Mato Grosso do Sul. City of about 900,000. Had lunch at Costelariado Gaucho Gastao, a neat steakhouse where you get your “fixins” at a buffet, than waiters bring huge slabs of meat right off the rotisserie, and carve off a sampling on your plate. Ribs, tenderloins, chorizo sausage. In Brazil, you don’t eat steak per se, because the meat is so lean and tough. Instead, you eat thin shavings of meat that is very well prepared. Toured the EMBRAPA federal ag research center. A fascinating introduction to Brazilian beef cattle production and range science. They run about 3400 head. South America is a very old continent, throughout the eons the abundant rain has leached the tropical soils. Leaving the soils a rust red, acidic, silty clay loam about 2 M deep, being about 20% sand. PH 4.2, very low organic matter, high in Aluminum and low in phosphorus. Another interesting fact is that South America is the only rangeland in the world that never had any ungulate grazing pressure over the generations. Therefore, the native grasses have not been selected to withstand grazing pressure. The Brazilian beef cattle industry is based upon introduced African grasses. Tropical grasses are lower in protein, carbohydrates, and digestible cell sugars than grasses from more temperate climates, (Rye, orchards, wheats). The African grasses (Brachiaria, Elephant grass, Guinea grass) average 13% CP, the introduced legumes (forage peanuts, Stylosanthes) average 20%. The tropical grasses still photosynthesize at up to 104 and can grow in waterlogged soils. At the station, they rotate 3-4 days on, 25 days off, and get gains of up to 1 kilo per day. Stands can last up to 20 years. The Guinea grasses are more productive than the Braciaria, but are harder on the soil. They yield 18T in a year DM per acre if harvested. The Brachiaria spread with seedpods, like a spider plant, as well as rhizomes. They are drawing interest from the cellulosic ethanol industry, but I don’t think they can compete with sugar cane. It seems that at Embrapa, they do mostly range (pasture) research. We were told that they are doing some vaccine work in the areas of ticks, horn flies, and botulism. Brazil is the world’s largest producer and exporter of tropical grass seeds. One big problem they have with the improved pasture is the Spittlebug, which is an insect that causes the grasses to dry down early in the growing season, which reduces stocking rate and gains. Due to the vast quantity of acres affected, insecticides are too costly. Biological controls consisting of a fungus and parasitic wasp are not ready for prime time due to the fact that they do not reproduce on their own and have to be consistently reintroduced. Therefore, the goal of the researchers is to introduce diversity and resistant grasses. It seems the main focus is on range, and not so much animal, science. Other Brazil facts: We were told that the Brazilian unemployment is officially reported at 8%, but most people think that figure is too low. I tend to agree from what I saw, especially in the big cities. Not as many people standing around as you would see in pictures of the American depression, but more than you would see in Denver or Billings. Only saw a few panhandlers, however. Cattle are traded by the Hopa, which is 15 kilos. When you cross over ½ non Bos Indicus, you get susceptible to ticks and Anaplasmosis. Last FMD outbreak came from Paraguay in 2005. Brazil has the world’s largest beef herd at 191 million, but the US with 90 million, produces more beef. Was 200 million in 2005, down due to FDM in ’05 and increased acres going to sugar cane. World beef production goes in this order: US, Brazil, China, EU, and Argentina. Brazilian exports 800 million in 2000. 5.2 billion in 2008. Markets in order are Russia, and EU. Brazilian retail ag loans are currently priced at 6%. Brazil has packing over capacity, some killing now at 50%. Big 5 kill 90% JBS is the biggest. Slaughter rate is 21%, which is defined at total killed annually divided by total head. Environmental regulations: 20% of all ground must be in reserve. Which means fenced off and in the natural wooded lands, which they call “monkey scrub”, and not to be grazed at all. This land is exempt from taxation, but the ranched receives no direct govt. payment. Cattle must be fenced 30 to 500 meters from flowing water. In the Amazon region, the ration is the opposite, only 20% of the land may be used for grazing. The further south you go, the more crossbreeding. The further north you go, the more straight bred Nelore, due to the more tropical climate. Brazilian cattle are being forced north, due to better acres going into sugarcane and soybeans. 50 to 55% dress on the Nelore grass fats. Cows and bulls 48%. Some farmers sell on the actual HCW, or if they sell live, it is done on a “pencil yield” of 52 on fats, and 48 on cows and bulls. (Aged cattle over 3-4 years) First estrous at 18 to 24 months, 60-80% conception rate. Big fall out on second conception. Calve from July-Oct, with the peak in Sept. Day Three January 17, 2009 – Campo Grande to Bela Vista Fazenda Prata de Lei-Marca JD. Owned by Sergio Prandini and family. One of the biggest and most prestigious Nelore seedstock operations in Brazil. 90% of the Brazilian herd is Nelore. They use extensive AI and ET, calve year round. 240 hectares, some irrigated, run 10-12 AUM per hectare. Mr. Prandini said 1 AU per hectare is average for the country. They have a commercial ranch in southern Mato Grasse Do Soul that runs 5000 cattle, and another in the Amazon that runs 15,000 commercial. When an American rancher tells you how many cattle he runs, he is talking about mother cows. In Brazil, he means all cattle, including the grass fat cattle that may be on the place 3-5 years until they make weight. Main vaccination program seems to be foot and mouth, anaplasmosis, Bangs, and a clostridial that included Botulism. Bangs vaccs are branded on the left jaw. I found no producer that vaccinated for any of the virals found in our Modified Live 5 ways. (BVD, IBR, PI3, BRSV). Foot and mouth needs to be given twice annually in some places, once in others, like the Pantanal, but is sounds like twice annuals will be mandatory by 2010. Vaccine leaves a big bump on the neck; half of the cattle we saw had it. They are experimenting with Tifton, a hybrid wild rye. Lots of govt. intervention and approval required in the areas of water development, fertilization application, reserve, irrigation, even fencing.
His bulls are
ready to work at 18 to 24 months, sounds like the turn out ratio is about
the same as ours, one per 20-30 cows. Sells bulls at auction and by
private treaty as well as a pretty big show string. He collects birth
weight and checkweighs every 90 days after that. They do have an EPD data
bank with their national Nelore association, but it sounds like it’s in
its infancy. They test all bulls TB negative before sale. They get a
90-95% conception rate on their females, but this is a top of the line,
very flashy seedstock outfit. Cattle get a lot of extra feed, they were
all 2-3 Day Four, January 18 - Bela Vista On the way to Bela Vista last night, we would see long lines of shanty towns that had sprung up in the barrow pit along the paved road in front of somebody’s farm. These are the Sinterra (landless). Some are broke farmers, most are transplanted from the slums of Rio and Sao Palo. The way it works is this. The government, more specifically the MST, can declare a farm either “unproductive” or “abandoned”. In such a case, they simply take it away from the owner and give a hectare or two to each Sinterra. That’s what they were waiting for camped out in front of the farm. Obviously, they had been tipped. Even here, with a lower standard of living, they can’t feed families off 5 acres, so after a year or two, they abandon the plot and move on. The government than offers to sell the land back to the original landowner, hoping he has “learned his lesson”. This scam buys the ruling party political capital from the poor, as well as funds from selling the land back to the original owner. Clint knows of a man who sold or moved his cattle during an especially dry season because he was out of grass. He then went down to Rio to stay with family until the rains came again. When he returned after only 2 months, his farm was a shanty town. A little excess verbiage here, but this is important. In some ways, visiting this region is like going to another planet. The differences in climate, grasses, cattle, and production systems are that extreme. However, in other ways it is like being in any small town in rural America. Some ranchers sit on mounds of old family money, some barely scratch by. Some are good operators, some places look like a dump. Farmers get together and gripe about the weather, the packers, and the government. Sit in any sidewalk coffee shop and the only difference in conversation you would hear would be the Portuguese, and they would talk soccer instead of football or baseball. However, this blatant thievery by the government is unheard of in our society. Americans take, like so many of our blessings, our private property rights for granted. When we are our selling memberships to our state or national cattleman’s associations, we always give lip service to the importance of property rights, but we have no conception of what a business climate without them would entail. Private property rights are the backbone of any society, because without them, you have no capital. Without capital, you have no efficient production and distribution of goods and services to the masses, and poverty inevitably results. Case in point: railroads. Although the major soybean region is north in the state of Mato Grasso, we did go by some soybean elevators. Not really elevators, but drying dumps where the beans are dried and stored in huge horizontal Quonset huts. Most of the ones we saw were owned by Cargill. However, unlike a wheat elevator back home, these beans will be shipped hundreds of miles by truck to the coastal ports because there are no railroads. Whenever an entrapaneur built a railroad, the government would nationalize it. The next guy would build a track with a different gauge, thinking that would protect his investment, and that would be seized as well. So now, what trackage there is in the country is largely incompatible. Toured Fazenda Tamandua, a 2400 acre family ranch. This ranch has excess reserve, so they are in the process of clearing it and making charcoal from the trees. They sell it to a steel mill. The decreased price of steel has made this a breakeven process at best, but they did make good money during the commodity bubble. Farmers have no incentive from the government to keep excess reserve. When the native scrub is cleared, they will plant eucalyptus trees (introduced from Australia) to make charcoal or use them for fence posts is the steel price is still low. From planting, these trees are ready to harvest in 5 years. They are also putting some better land into beans and cane. Didn’t see any cattlemen do their own farming, they crop share it out for an 80/20 split. The farmer receives 8-10 sacks per hectare, the landowner gets the balance. 60 sacks/acre aver yield.
Day Five January 19, 2009 – Bela Vista, Jardim, Bonito Fazenda Rio de Prata. Watched the Gouchos processing AI cows. Synch program is CIDR on day one, 3cc Lutalyse on day 7, Pull CIDR, give GNRH and ECP on day 9, heat detect 48 hours and appointment breed at 72. Said getting 86% conception, but I think that is total. AI to Argentinean Angus. This year’s calves are only 1/3 black, if that is any indication. Vet on the tour said the Lutalyse concentration is the same as ours. Here the grass fats gain around 1.65#/day. 60-70% catch at 2 years old, but goes down at second service. This ranch supplements income with tourism. They have a dude string, and you can snorkel down the Prata freshwater river. Very environmentally conscious. No sunscreen or insect repellant in the water, can’t talk in loud voices or splash. Stream in entirely spring fed, you can see it bubbling up out of the bottom of 12-15’ deep pools. Looks like lava, the way the sand percolates. Tamest fish I ever saw. They swim right up to your snorkel. Day Six January 20 – Bonito Toured the Blue Lake cave. Climb down almost 1000 feet into the cave to see a lake at the bottom around 400 feet deep that is crystal clear and turns deep blue when the sun hits it. Breathtaking. Better cared for than many national monuments in the states. Sao Geraldo Ranch. A Nelore seedstock producer that uses tourism, horseback riding and freshwater snorkeling, to add to ranch income. He has sold females for $500,000 to $1,300,000. Extensive AI and ET. He told us the lease rate for pasture would be about $5 per AUM for pairs. Grass finishing is done on the gain. Commercial semen goes for about $5-$6 per straw. They don’t have a bred female market per se, but a 2 year old replacement heifer ready to breed would cost about $230. Dined with the president of the local cattleman’s association, who is actually a small dairyman. He said his cows are Olendazia, which is a ¼ Holstein, ¼ Jersey, and ½ Gir. Same story a with the beef guys, get under ½ Bos Indicus, and the cattle won’t stand up to ticks, disease, etc. His cows will give about 3000L per month. Is trying to get his fellow small producers involved in a coop like arrangement to produce organic milk for a big dairy in Sao Palo. He sounds a lot like some guys you hear of out here: long on ideas and short on capital. The Organic angle might work better out here, because the cows hardly ever eat processed feedstuffs. Depends on how much people are willing to pay. Day Seven January 21 – Pantanal Highlight of the tour. The Monteiro family operates Fazenda Sao Roque and Fazenda Sao Joao, totaling over 20,000 hectares. Mr. Jose Lemos Monteiro was not there, but he is a doctor. His wife’s family emigrated Checkoslovachia to escape Hitler. The three sons run the ranch, run cattle of their own, and also operate the safari sideline. All in their twenties, they are very well educated, speak several languages, but are in no way “trust babies”. They know how to work, and got their first cattle by borrowing money from a bank to get started. They also have a setup where they borrow startup capital from urban business people, maybe dad’s contacts. Say the investor sends the boys 100 bred cows in year one. The boys take all the risk of loss, provide all operating expenses, and pay to the investor the value of 20 head of steer calves each year for five years. At the end of five years, the boys return 100 head of bred cows the same age as was originally provided. The only risk the investor runs is the value of the calves at weaning. In other words, the boys take the production risk; the investor takes the market risk. The Pantanal is an area of wetlands and marshlands about the size of the Dakotas. A delta of drainages that eventually ends up in the Paraguay River. Most of the flooding on the ranch we saw comes from the Rio Negro. Waters are about halfway up this time of year, will rise in the lowlands another foot before receding in the dry season. Took us over six hours by van to get to the ranch after leaving Bonito. Worst gravel roads I ever saw, we couldn’t have averaged 30 mph. When we turned off the main gravel road and onto the (driveway) we still had 16 miles to go, with a gate every mile. No autogates in this country, all free swinging gates easily opened horseback. Most commuting is done by airplane. The gauchos look like Paraguan Indians. We were told most only have 2-4 years of primary education, and many are illiterate. High turnover, like all big outfits, but a few are lifers. That was part of the reason for starting the safari business, to make jobs for some of the wives in cooking and housekeeping. One problem is if the cowboys have kids, because there is no way for them to go to school, but I got the feeling it’s not a real big priority. For us Americans, it seemed like more of a class system than we were used to. None of the crew will ever look you in the eye. Whenever we would try to open a gate, help break camp and clean up after we stopped to eat, or handle our own luggage, I think we offended our hosts a little. Those are jobs for “the help”. As I stated earlier, the boys work right alongside the gauchos on big days, but there is a big, and probably uncrossable line between the landowners and the workers. Married cowboys have their own houses, which aren’t too bad, and the single cowboys have a bunkhouse and a cook. Cowboys get around $250 dollars per month and found. Ranch provides horses, which are raised on the ranch. Big death in the horse herd loss due to snakes and jaguars. Cowboys get one month vacation and a one month bonus at the end of the year. They start about 5:30 this time of year, and will go until 7 or 8, but they knock off for about two hours in the heat of the day. Health care of socialized in this country, so it’s not really an issue. We asked if any of the long term cowboys or foreman ever got to run some of their own cows. They kind of ducked that question, so I assume it’s pretty rare. One difference is that all Brazilian workers are required by law to keep a journal (resume) that lists all employment. If they are fired after 5 years employment, the employer is levied at 40% unemployment tax, so they have a problem with turnover after that time, because the employees know they can basically go on welfare after that time. Thus ranch has been experimenting with some Brangus crossbreeding on the Nelore, but like we have heard, don’t want to get over ½. Replacement heifers will breed up at about 70% at 24 months, but the weaning percentage drops to 55% due to predator loss, primarily from Jaguars. There is absolutely no hunting in the Pantanal, and it sounds like penalties are severe. They can hunt the wild pigs, because they are not indigenous. The cowboys will sometimes rope, castrate, and ear mark the wild pigs. They turn them loose and hunt them later because they are better to eat than boars. Average calving interval is 500 days. They turn the bulls out twice, with a rest period in between. Fat cattle are sold picked up at the ranch. The ranch has to pay a $3.50 per head transportation tax every time cattle are moved by truck, plus 50% and 40% of the retail price of gas and diesel, respectively, is in taxes. Fat cattle will eat around 80g per day of mineral. They are working with chelates, but it was hard to get any specifics. Fat heifers are usually priced 10-15% back of their steer mates because the packer knows he’s going to get a higher % of older cattle in that mix. The boys said some neighbors sell calves or feeder cattle instead of fats, and in that case, the heifers are 40% back. Fence is all a single strand smooth wire with all wood posts. 4-6 strands strung through holes drilled through the post. I bet this wood is too hard to hold a staple. Lucas told us the wire costs $110/km, posts cost $8 if you don’t cut them yourself. That tallies to new fence costing about $2000 per km, but it will last 40 years. They are experimenting with a homemade post treat to make it last even longer. They tried electric fence, but had limited success due to excessive grass and low water grounding it out. Bulls are castrated at around 14 months, and will make slaughter weight at 30-34 months. Fat cattle today brought $.56/cwt live picked up. If the carcass weighs less than 479kg, they are discounted 10%. Cull cows are discounted under 380 kg HCW. Cattle are dewormed 3 times annually. The first time as yearlings are given Dectomax injectable, than an ivermactin pour on and a safeguard each year after that. This ranch stocks at about .85 AU/hectare. We saw seven gauchos gather about 20 sections of marshland which had 3300 feeder cattle from 300 to 800#. They will need to move out of this lowland pasture in about 3 weeks as the water will come up another foot, which will not leave enough bedground. There is plenty of grass left. The emphasized repeatedly that the cattle will stand belly deep in water all day to graze, but mush have dry bed ground. The gauchos gather this pasture weekly to check health. Possibly also for a tourist show. When asked what health problems they looked for, we were told diarrhea, footrot, and screwworms. Very little if any respiratory. We saw them rope a bull that got missed. They pop the top and pull the vein just like we do. They also treated scours with an injectable tribrissin. All shots given in the lower butt. BQA hasn’t made it this far south. Cowboys would cut the one they want out of the bunch like you would pull a dry cow at branding, the sneak loop her when she tried to get back in the bunch. Pretty low stress handling. They swing a huge loop and hold 2 coils in their throwing hand. They don’t pull slack, but the burner is so fast, they probably don’t need to. Tied hard and fast to the back cinch ring. Tail down after a neck catch and a little oxygen deprivation.
After looking at some more cattle on the main place this morning we headed to the other farm and feedlot. Extra gauchos were brought along this morning to make damn sure we didn’t open any gates. Here they have a 500 head feedlot that they use during the dry season. Its primary purpose being to not have to sell light fats at the beginning of the dry season, and to let the grass get a head start when he rains come. Last year cattle were fed 50% grainless sorghum silage, and 50% cracked corn and supplement. Cattle are stepped to this ration in 3 days, which seems a little quick. Cattle are fed 30 days and gain 2.5. Feed twice daily with 20 inches of bunk space. 2.4 to 2.5% DM intake as a % of BW. More DOF and they would take a fat discount. He said they get some founders. Sorghum silage is put up at about 30% D and will yield 15T. He also grows grass silage which will yield about the same, but 5-10% less dry matter. Both crops are inoculated in the pit. Despite this, he wants to move to straight grass silage because he won’t have to seed every year. Can’t grow corn silage because the pigs eat all the seed. Upon our return to Campo Grande that evening, we stopped at the Correa da Costa livestock auction, which is the largest livestock auction in Brazil. They sell in the evenings due to the heat. 4 nights per week plus specials. Average 4000 head per week. Sell feeders, cull cows and bulls, grass fats, and seedstock. Buyer pays 3%, seller pays 2. Buyer pays seller direct, auction doesn’t handle the money. The manager told us that he does guarantee payment to the seller, but he is the only auction that does so. Last year he did 4 million in sales, and ate $15,000 in bad debt. Buyers can bid in person, on the phone, or on the internet. Much slower paced sale. Each consignor expects his cattle to be in the ring for no less than 3 minutes. Between each sale, the auctioneer will take a break for 2-3 minutes during which American country music is pumped in and uniformed waiters rush in for more drink or food orders. Cattle are weighed after sorting upon arrival and that is the payweight. There is no scale under the ring. If you want your cattle fed in the yards, you have to provide the feed. Cull cows and bulls are sold together in the ring, if they won’t hang a 500# carcass, more or less, they’ll go back to grass. Feeders are loosely sorted for size. Steers bring a slight premium over bulls, but not much. Four to five weight cattle were bringing between $.40 to $.50. Most between 2-3 years old, few yearlings. Cattle are rail thin, seems like quite an opportunity to purchase stocker cattle. Not much slide for weight that we could see. Looked like the straightbred Nelore brought more than the crossbreds. Day 9 January 23 Campo Grande Tour of JBS didn’t go through, but we did go to a supermarket and talk to the meat manager. His chain sells over 11 million dollars of meat annually. He buys from all of the big 5, on a bid and ask basis. When asked what his customers prefer, he said lean. Most meat is sold hanging in a cooler behind glass. The butcher cuts the meat to specifications and gives cooking advice. He said his customers don’t like to buy the individual cuts wrapped in cellophane. I think we as an industry were short sighted when we got rid of the neighborhood butcher. Day 10 & 11 Rio Dejaneiro Only part of the tour I could have missed. Did the touristy things, saw Copacabana beach, the Christ statue on the mountain, etc.. All of us were appalled to some degree by the slums and shantytowns, the pollution, and wide spread between rich and poor. The gauchos on the ranches have it pretty good compared to these people. It did make me realize how much visitors to Brazil are missing if Rio is all they see.
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