Agricultural Outlook Forum February 21-22, 2008 U.S. Department of Agriculture

Brazilian Agribusiness

Edilson Guimaraes

EDILSON GUIMARÃES

Secretary of Agricultural Policy

Ministry of Agriculture, Livestock and Food Supply

February 22, 2008

BRAZILIAN AGRIBUSINESS

TOTAL GDP (2006): US$ 1.067 billion

JOBS (2006)37%

Agribusiness

TOTAL EXPORTS (2007): US$ 160.6 billion36.4%

Sources: CEPEA-USP/CNA, MAPA and IPEA

23%

Agricultural and Livestock

Production

38 38 36 39 39 37 37 35 37 38 38 40 44 47 49 47 46 4658

68

83

97

132

136

121

114

119123

100

827778

748176

68

91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08*

A r e a a n d P r o d u c t i o n

( m i l l i o n h a a n d t o n )

AREA

Grain Production

PRODUCTION

* Estimate

Source: Conab / MAPA

GRAINS: cotton, peanut, rice, oats, rye, barley, beans, sunflowers, castor bean, corn, soy, sorgum, wheat and triticale.

237%

61% 60%

104%

79%

Raw cotton Rice Beans Corn Soy

Average productivity growth(1991 and 2007)

Source: Conab / MAPA

Meat Production

10.6

5.2

3.4

9.8

3.0

1.3

1

2

3

4

5

6

7

8

9

10

11

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

P r o d u c t i o n ( m i l l i o n t o n )

Sources: APINCO, ABEF, ABIEC and ABIPECS

Beef: 104%

Pork: 124%

Broiler: 188%

Sugar and Ethanol Production

Source: MAPA

29.1

7.4

20.5

11.5

0

5

10

15

20

25

30

35

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

m i l l i o n t o n a n d m

3

SUGAR

ETHANOL

Location of ethanol plants

Sources: NIPE-UNICAMP, IBGE and CTC

Elaboration: Unica

Plant in construction or in project

Current plant

AMAZON

PANTANAL

Sugar Cane Fields

Land use in Brazil

Area

Million ha %

Amazon Forest 360 42%

Pasture 210 25%

Yearly crops 49 6%

Perennial crops 15 2%

Cultivated forests 6 1%

Non exploited 101 12%

Cities 20 2%

Protect areas 52 6%

Others 38 4%

Total 851 100%

Sources: IBGE and Conab _ Adaptation: MAPA

Cerrado

“Savanna”

Livestock

Livestock Area Decrease - 63 million ha

* São Paulo

Sources: IBGE and IEA / SP

Potential Increase on Land Availability

Livestock Area Productivity Livestock Area Productivity*(million heads) (million ha) (head/ha) (million heads) (million ha) (head/ha)

206 210 0.98 206 147 1.4

2006 Estimate

Agricultural and Livestock

Sound Practices

SISBOVLivestock Traceability

Fruit Integrated Production

Organic Products

Safe Food Program

National System for theCertification of Warehouses

Food Quality

No Tillage

Agriculture/Livestock/Reforestation

Integration Program

Degraded pasture

Crop Livestock

Agricultural/Livestock/Reforestation Integration Program

Reforestation

Foreign Trade

Wood and Products

15.1%

Tobacco

3.9%

Cereal, Flour and

Products 3.8%

Fruit Juice 4.1%

Leather and

Products

6.1%Coffee

6.7%

Sugar and

Ethanol

11.3%

Others 7.7%Fiber and Textile

Products

2.7%

Beef

19.3%

Soy Complex

19.5%

Coffee5.6%

Leather and Products9.4%

Sugar and Ethanol9.1%

Wood and Products17.2%

Beef12.9%

Soy Complex24.2%

Others9.7%

Textile Products3.5%

Tobacco4.1%

Fruits Juice4.4%

Source: MAPA

Brazilian Agribusiness Exports (by value): Main Products

2002 2007

E.U-2537.3%

USA16.7%

ASIAEXCEPT

MIDDLE EAST and CHINA

11%

MIDDLE EAST6.3%

OCEANIA

0.4%

OTHERS14.5%

CHINA5.5%

AFRICA

5.4%

MERCOSUR

2.7%

USA11.0%ASIA EXCEPT MIDDLE

EAST and CHINA11.3%

MIDDLE EAST8.1%

CHINA8.0%

E.U-2735.8%

OTHERS15.9%

AFRICA6.5%

MERCOSUR3.0%

OCEANIA0.5%

Brazilian Agribusiness Exports (by value): Main Markets

Source: MAPA

20072002Total: US$ 24.8 billion Total: US$ 58.4 billion

58.4

49.4

43.6

39.0

30.6

24.823.920.6

8.7 6.7

5.2 4.9 4.8 4.5 4.8 5.8 0

10

20

30

40

50

60

2000 2001 2002 2003 2004 2005 2006 2007

Source: MAPA

14.8

20.3

25.8

34.1

38.4

19.1

42.7

49.7

Agribusiness Trade Balance

(US$ billion)

EXPORTS

IMPORTS

SURPLUS

49.7

40.0

-9.7

-30-25

-20-15-10-505

1015

202530354045

50

8 0 8 1 8 2 8 3 8 4 8 5 8 6 8 7 8 8 8 9 9 0 9 1 9 2 9 3 9 4 9 5 9 6 9 7 9 8 9 9 0 0 0 1 0 2 0 3 0 4 0 5 0 6 0 7

U S $ b i l l i o n

Source: MAPA

Brazil Trade Balance

TOTAL

AGRIBUSINESS

OTHERS

2002 2007 2002 2007

Suggar 89 115 2,093 5,100

Coffee 105 130 1,385 3,891

Orange Juice 50 73 1,041 2,252

Soy and products 82 83 6,006 11,381

Beef 107 150 1,144 4,424

Wood and Products 151 171 2,214 4,090

Ethanol 38 44 169 1,478

Broiler 102 153 1,393 4,620

Corn 27 39 260 1,882

Pork 48 77 486 1,230

Number of Markets Total Exports (US$ million)Main Products

BRAZIL AGRICULTURAL EXPORTS

Source: MAPA

Concluding Remarks

ADVANTAGES CHALLENGES

� Competitiveness

� Entrepreneurship

� Research infrastructure on tropical agriculture

� Land and water availability

� Bio-energy production

� Infrastructure

� transportation

� storage

� seaports

� Limited financing resources

� Agricultural debit

� World economy scenario

THANK YOU!

� 55 61 3218-2505

� edilson.guimaraes@agricultura.gov.br

Edilson Guimarães

Secretary of Agricultural Policy