Projections for Mato Grosso -...

Projections for Mato Grosso Agribusiness to 2025

12/2015

Instituto Mato-Grossense de Economia AgropecuáriaMato Grosso Institute of Agribusiness Economy

2

Rui Prado President

Otávio CelidonioSuperintendent

3

Daniel Latorraca – Projects ManagerÂngelo Ozelame – Technical ManagerSc.D. Anderson C. S. Oliveira – Professor of Statistics - UFMT*Sc.D. Juliano Bortolini – Professor of Statistics - UFMT*Sc.D. Marcelino A. R. de Pascoa – Professor of Statistics - UFMT*Talita Takahashi – Financial Administrative ManagerJéssica Brandão – Executive Secretary / ControllerFrancielle Lima – Financial Administrative AssistantPaulo Ozaki –Beef Cattle AnalystAna Paula Baroni – Dairy Cattle TraineeSâmyla Sousa – Economics Scenario TraineeTiago Assis – Geoprocessing AnalystJosé Victor – Cotton TraineeTainá Heinzmann – Soybean AnalystYago Travagini – Corn TraineeKimberly Montagner – Cost of Production Trainee Mariana Yumi – Cost of Production AnalystMiqueias Michetti – Cost of Production Trainee Rafael Chen – – Cost of Production AnalystRondiny Moreira Carneiro – Statistics Trainee

Team

* UFMT – Federal University of Mato Grosso

Index

4

1. Contextualization ................................................................................................ 5

2. Methodological Notes – Agriculture .................................................................. 7

3. Soybeans ............................................................................................................. 8

4. Corn ................................................................................................................... 11

5. Cotton ................................................................................................................ 15

6. Methodological Notes – Livestock .....................................................................18

7. Beef Cattle ......................................................................................................... 19

8. Poultry ...............................................................................................................22

9. Swine ................................................................................................................. 25

10. Summary ........................................................................................................... 29

11. Final Remarks .................................................................................................... 30

Contextualization

5Note: OCDE Projections for Gross Domestic Product - -Baseline is 2010-2050

World Population will grow 10% (FAO), reaching 8.1 billion people in 2025;

Rural emigration will continue, according to FAO;Urban population will grow from 54% to 58% andRural population will reduce from 46% to 42% by 2025;

According to OCDE, Brazil will be responsible for 40% of the demand growth supplyfor food, fibers and energy by 2025;

According to IMEA, current Mato Grosso State potential to convert pasture areas toagriculture is aproximately 15.6 million hectares;

Contextualization

6

The Scenario assumed to expect the projected growth is more pasture landconversion into agriculture;

Biotechnology and farm management will be key for these growth projections;

We believe that official credit and investment incentives from BrazilianGovernment will drive the growth;

We expect more industrialization of the raw materials in the coming years;

Mato Grosso is expecting some infra-structure development on roads, railroadsand waterways for the next years, that may reduce the freight cost and increasecompetitiveness.

Methodological Notes - Agriculture

The Box-Jenkins Method was used to modeling the series for PlantedArea and Production of Corn, Soybeans, Cotton, in different regions ofMato grosso State;

The Mato Grosso results for planted area and production are given by the sum of the macro-regions values;

Confidence intervals were obtained by bootstrap simulation with a 95% level confidence;

Brazilian Institute of Geography and Statistics (IBGE) data from 1990 to2014 were used, since it’s the older data by county available;

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8

From 2014 to 2025

68.9%60.0%

51.3%

0,0

2,0

4,0

6,0

8,0

10,0

12,0

14,0

16,0

20

08

20

09

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Histórico Projeção Limite Inferior Limite Superior IMEA Outlook 2022

Area(million hectares) 2013/14 2024/25 Var %

Soybeans 8.63 13.81 60.0%

Soybean Area in Mato Grosso State(Million hectares)

Historical Projection Lower Limit IMEA Outlook 2022 Higher Limit

Note: Values were rounded.Source: IBGE –Municipal Agricultural Production; Imea – Outlook 2025

Soybean Production in Mato Grosso State(Millions of Metric tons)

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From 2014 to 2025

74.4%65.8%

83.6%

0,0

10,0

20,0

30,0

40,0

50,0

60,0

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Production(MMT) 2013/14 2024/25 Var %

Soybeans 26.50 46.20 74.4%

Note: Values were rounded.Source: IBGE – Municipal Agricultural Production; Imea – Outlook 2025


Soybean Production by Region: 2013/14 and 2024/25 (Millions of Metric tons)

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Region1 - Northwest2 - North3 - Northeast4 - Middle-North

5 - West6 - Central-South7 - Southeast

9.33

13.05

2014 2025

1.713.56

2014 2025

3.315.02

2014 2025

4.42

9.39

2014 2025

5.60

8.60

2014 2025

0.602.46

2014 2025

1.534.12

2014 2025


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From 2014 to 2025

85.8%

69.4%

108.1%

0,0

1,0

2,0

3,0

4,0

5,0

6,0

7,0

8,0

20

08

20

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Area(million hectares) 2013/14 2024/25 Var %

Corn 3.35 6.22 85.8%

Corn Area in Mato Grosso State(Million hectares)



Corn Production in Mato Grosso State(Millions of Metric tons)

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From 2014 to2025

97.8%

113.2%

129.1%

0,0

5,0

10,0

15,0

20,0

25,0

30,0

35,0

40,0

45,0

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Corn 18.07 38.53 113.2%



Corn Production by Region: 2013/14 and 2024/25 (Millions of Metric tons)

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7.50

17.53

2014 20252.41

5.27

2014 2025

0.73 1.57

2014 2025

4.187.31

2014 2025

0.30 0.51

2014 2025

2.064.63

2014 2025

0.89 1.71

2014 2025




Soybeans and Corn Production in Mato Grosso by Region: 2014 and 2025(Millions of Metric tons)

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44.6

84.7

2.65.3

16.8

30.6

6.5

14.0

2.35.7

0.9 3.05.7

10.39.8

15.9

2014 2025

Source: IBGE; Imea, 2015

6 - Central-South 4 – Middle North 3 – Northeast 1 – Northwest 2 – North 5 – West 7 – SoutheastTotal Production

Cotton Seed Production in Mato Grosso State(Million hectares)

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From 2014 to 2025

37.1%

52.9%

97.9%

0,00

0,20

0,40

0,60

0,80

1,00

1,20

1,40

1,60

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Area(million ha)

2013/14 2024/25 Var %

Cotton Seed 0.61 0.94 52.9%



Cotton Seed Production in Mato Grosso State(Millions of Metric tons)

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From 2014 to 2025

42.8%

57.3%

72.3%

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

4,5

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Cotton Seed 2.38 3.75 57.3%



Cotton Seed Production by Region: 2013/14 and 2024/25 (Millions of Metric tons)

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0.99

1.51

2014 2025

0.26 0.25

2014 2025

0.390.54

2014 2025

0.69

1.39

2014 2025



Note: Values were rounded. Northwest, Northeast and North regions aproximately zero. Source: IBGE – Municipal Agricultural Production; Imea – Outlook 2025

Methodological Notes - Livestock

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Vector Autoregressive (VAR) models were used for the meat production of Beef, Swine and broilers in Mato Grosso State;

The results by regions were obtained using “small areas” mathematical model;

Confidence intervals were obtained by bootstrap simulation with a 95% level confidence;

The Brazilian Institute of Geography and Statistics (IBGE) data were used for slaughter and meat production of Broilers and Swine by region, starting by the yearwhen at least 3 informantes of slaughtwehouses in a specific region;

Broilers data: 2001 to 2014Swine data: 2000 to 2014

INDEA-MT* and IBGE data were used for Beef Cattle slaughter and meatproduction series, starting in 2003.

INDEA-MT: Mato Grosso State Institute of Agricultural and Livestock Defense

Beef Cattle Slaughter in Mato Grosso State(Million heads)

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From 2014 to 2025

99.7%

33.9%

-31.8%

0,0

2,0

4,0

6,0

8,0

10,0

12,0

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Histórico Projeção Limite Inferior Limite Superior Outlook 2022

Slaughter(million heads) 2014 2025 Var %

Beef Cattle 5.52 7.4 33.9%

Historical Projection Lower Limit Outlook 2022 Higher Limit

Note: Values were rounded.Source: IBGE – Guide to Animal Transport; Imea – Outlook 2025

Beef Cattle Carcass Weight Production in Mato Grosso: 2014 and 2025(Millions of Metric tons)

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From 2014 to 2025

46.1 %

31.7 %

60.5 %

0,0

0,5

1,0

1,5

2,0

2,5

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Production(MMT) 2014 2025 Var %

Beef Cattle 1.33 1.94 46.1%


Note: Values were rounded.Source: IBGE – Quarterly Survey of Animal Slaughter; Imea – Outlook 2025

Beef Cattle Carcass Weight Production by Region: 2014 and 2025(Millions of Metric tons)

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0.33

0.49

2014 2025

0.050.09

2014 2025

0.260.34

2014 2025

0.10 0.17

2014 20250.21

0.32

2014 2025

0.110.15

2014 2025

0.270.38

2014 2025




Broiler Slaughter in Mato Grosso State(Million heads)

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From 2014 to 2025

36.2 %

133.2 %

84.7 %

0

100

200

300

400

500

600

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Poultry 227.9 421.0 84.7%



Broiler Carcass Weight Production in Mato Grosso State(Millions of Metric tons)

From 2014 to 2025

43.7 %

144.0 %

93.8 %

23

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0,2

0,4

0,6

0,8

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1,2

1,4

1,6

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Poultry Carcass 0.56 1.08 93.8%



Broiler Carcass Weight Production by region: 2014 and 2025(Millions of Metric tons)

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0.180.36

2014 2025

0.360.69

2014 2025

0.01 0.03

2014 2025Region

1 - Northwest2 - North3 - Northeast4 - Middle-North



Swine Slaughter in Mato Grosso State(Million heads) From 2014 to 2025

357.9 %

186.4 %

15.0 %

25

0,0

1,0

2,0

3,0

4,0

5,0

6,0

7,0

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10,0

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Swine 1.9 5.5 186.4%



Swine Carcass Weight Production in Mato Grosso State(Millions of Metric tons)

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From 2014 to 2025

193.3 %

182.6 %

203.9 %

0,0

0,1

0,2

0,3

0,4

0,5

0,6

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Swine Carcass 0.17 0.51 193.3%



Swine Carcass Weight Production by Region: 2014 and 2025 (Millions of Metric tons)

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0.16

0.28

2014 2025

0.01

0.20

2014 2025




Total Meat Production by Region: 2014 and 2025(Millions of Metric tons)

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2.1

3.5

0.5

0.8

0.6

1.1

0.1 0.20.1 0.10.3 0.3

0.20.30.3

0.6

2014 2025


6 - Central-South 4 – Middle North 3 – Northeast 1 – Northwest 2 – North 5 – West 7 – SoutheastMato Grosso

SUMMARY

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2014 2025 %

Agriculture (MMT)

Grains and Fibers 47.0 (100%) 88.5 (100%) 88.5%

Soybeans 26.5 (57%) 46.2 (52%) 74.4%

Corn 18.1 (38%) 38.5 (44%) 113.2%

Cotton Seed 2.4 (5%) 3.8 (4%) 57.3%

Livestock (MMT)

Meat Production 2.1 (100%) 3,5 (100%) 71%

Broilers 0.6 (27%) 1.1 (31%) 94%

Swine 0.2 (8%) 0.5 (14%) 193%

Beef Cattle 1.3 (65%) 1.9 (55%) 46%

TOTAL PRODUCTION 49.1 92.0 88%

Note: Values were rounded.Source: IBGE – Quarterly Survey of Animal Slaughter; Imea – Outlook 2025 IBGE – Municipal Agricultural Production

Final Remarks

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In Total Grain production, Mato Grosso will raise from 44.6 MMT in 2013-14 cropyear to 84.7 MMT by 2024-25 crop year, a 90% increase;

Soybean area increase projection is 5.2 million hectares. 60% increase from 2014 to 2025;

Fiber production may increase up to 57% by 2025, keeping it’s big share ofBrazilian production;

For Meat production, growth projected by 2025 is 71%, starting from 2.1 milliontons in 2014 up to 3.5 million tons. Poultry and Swine will increase production the most;

Beef production will increase 46% from 2014 to 2025 despite of the conversion ofpasture land into agriculture.

Thank you

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