Agribusiness / Growers

Part
01
of eight
Part
01

Brazil Agribusinesses Market Size: Apples

After an extensive search, we couldn't find any data for the total number and breakdown of apple growers in Brazil. However, we discovered that there are 4,550 apple growers in Brazil who produced 1.1 million metric tons of apples in 2018. We have inserted the number of apple growers in row 6 of the attached spreadsheet and for the information we couldn't find we inserted NA (not available) in the respective columns.

MARKET SIZE IN TERMS OF NUMBER OF GROWERS

  • There were 4,550 apple growers in Brazil in 2017.
  • Brazilian Association of Apple Producers (ABPM), which represents 90% of the total Brazilian production of apples, noted that most of the growers in Brazil are small-scale. However, commercial units, though few in number, still account for 40% of the production.
  • According to ABPM, the following are the best producers and exporters of apple in Brazil: Agroban Agroindustrial, Agropecuária Schio Ltda, Agropel Agroindustrial Perazzoli Ltda, Agrospe Agro Industrial São Pedro de Vacaria, Castel Frutas Comercial, Bortolon Agrocomercial Eireli, Fischer S/A Agroindústria, Fruticultura Malke, Frutini - Fruticultura Aliprandini, Pomagri Frutas, and Rasip Alimentos.

OTHER HELPFUL FINDINGS

  • Brazil produced 1.1 million tons of apple in 2018. This is the normal annual production level of apple in the country.
  • In terms of value, the market size of the apple industry in Brazil is worth $384.3 million (R$ 1.6 billion).
  • In terms of geographic breakdown, Santa Catarina is the largest apple producing state in the country with 575,700 tons of apple produced in 2018. Sao Joaquim region, part of the state of Santa Catarina, is responsible for 35% of the national apple planting with 2,400 fruit growers on 12,000 hectares planted.

Research Strategy:

The research team commenced our search by looking for statistics from government websites such as Brazil's Department of Agriculture and Supply. However, we couldn't find any data for the total number and breakdown of apple growers in Brazil. The same government agency noted that there are 9,093 small sized orange farmers, 1,062 medium-sized orange farmers, and 165 large sized orange farmers but we couldn't find data for apple growers only relevant regulations. We also searched for the data on USDA Foreign Agricultural Services. However, the most recent report is dated 2016 and the report presented the market size in terms of volume produced and total planted area.

Secondly, we searched for the largest apple organizations in Brazil and looked for the number of members. We found Brazilian Association of Apple Producers (ABPM), which represents 90% of the total Brazilian production of apples. ABM released the Brazilian Apple Yearbook which showed that there are 4,550 growers in the country and noted that most are small-sized growers but there is no breakdown among small, medium, and large growers.

Lastly, since we had the total number of growers, we tried to triangulate by looking at the percentage of small, medium, and large size apple farmers in Brazil. Again, we couldn't find such data despite an exhaustive search on government and apple associations directory in Brazil. One report noted that there are 4.4 million small sized farms or family farms in Brazil which makes ups 85% of all agricultural operations in the country. This overall report agrees to the comment of ABPM that most of the apple growers in the country are small-sized. However, that report is about the overall agricultural landscape in Brazil and doesn't have a breakdown in terms of the type of produce.
Part
02
of eight
Part
02

Argentina Agribusinesses Market Size: Potatoes

There was no information available on the market size for potatoes in Argentina on the public domain, therefore the attached spreadsheet in row 27, columns M-Q no information was inputted. Below is an overview of the information that was available.

USEFUL FINDINGS

  • According to the Food Innovation Online Corp on the PotatoPro platform, in Argentina, the potato output has changed very little in 50 years. Since the early 1960s, the national harvest was on average around 2 million tonnes, with only occasional peaks.
  • The potato production in the country in 2017 was reported to be 2,454 million tonnes, the potato yield was reported to be 323,003 hg/ha (hectogram per hectare), and potato was harvested from an area of 75,975 ha, according to data from the FAO based on the imputation methodology.
  • Analysis from the past year shows that the only changes marked in the potato production in Argentina are the yield which was reported to be 291,312 hg/ha in 2015 and increased to 323,003 hg/ha by 2017. However, a steady drop in the size of the harvested area is noticeable as the size has decreased from 200,000 ha in 1961 to around 68,000 ha in 2007.
  • The potato production in Argentina can be characterized as large-scale and highly mechanized and takes place around Buenos Aires and Santa Fe.
  • According to the FAO, Argentina has 39.2 million ha of arable land of which 1 million ha is under permanent crops and 108 million ha of land is under permanent meadows and pastures.
  • ADRagricola, an Argentinian company, produces and markets potatoes.
  • HZPC América Latina S.A., a subsidiary of the Dutch potato company HZPC Holland BV, is another company that produces potatoes in Argentina.
  • According to Mordor Intelligence, Argentina's major crop production comes from soybean and maize, which are considered the most profitable oil seed and cereal. Consequently, the growth of other market segments has been minimal in the past 20 years. The most important fruits and vegetables are grapes, apple, limes and lemons, pears, onions, garlic, potatoes, and tomatoes.
  • The lemon and potato exports have been showing a CAGR of 7% and 46% respectively between 2011-2016, which indicates that it has a high future potential in Argentina.

RELATED INFORMATION

  • According to eFarm News, the Argentinian potato seed market is segmented into two large segments: fresh consumption and industrial use. Currently, the Dutch company HZPC, based in Buenos Aires, is renewing the potato seed market in the country.
  • Farmers plant an estimated 76,000 hectares with potatoes and 25% of this area supplies the industry while 75% supplies fresh demand.
  • According to HZPC's annual report, its business in Argentina is taking huge steps forward and the company is principally applying to grow under license in this area.
  • Argentina is ranked at #27 in the potato production in the world with 2.5 million tons volume in 2017.
  • The Servicio Nacional de Sanidad y Calidad Agroalimentaria (SENASA), translated in English the National Agrifood Health and Quality Service, is a government organization. SENASA approves and supervises private inspection bodies and offers various resources related to agribusiness. It also offers real-time producers statistics and resources along with imports and exports of various products in the country, but no information on the potato growers is found.
  • In Argentina, one of the oldest farmer organization is Movimiento Argentino para la Producción Orgánica (MAPO) translated in English the Argentine Movement for Organic Production.
  • MAPO and SENASA had an important role in formulating and implementing the National Programme for the Development of Organic Agriculture in Argentina.

RESEARCH STRATEGY

To identify the information on the market size for potatoes in Argentina, we began our search by examining ministerial reports, surveys, research studies, market reports, and publication on the agribusiness /potato growers in the region on government websites (such as the Ministry of Agriculture, Animal Husbandry, Fisheries and Nutrition and SENASA), farmers organizations (such as MAPO), companies that provide market reports (such as Mordor Intelligence, IBIS), news articles (from sources such as Agri News), academic research (such as Researchgate), and others. Through this search, we found that most information available was about the market size of the potato production in the region and its growth rate, highlighted the potential growth in the segment, shared information on the production and exports of potatoes. However, no information related to the market size for potatoes in Argentina based on the number of growers/agribusiness was available.

Next, we attempted to triangulate the information by identifying the major potato business/growers in Argentina and searching for detailed information on the number of growers they possess or the size of agribusiness managed by them (small/medium/large) to support the estimation. Using information from the previous sources and exploring regional agribusiness databases (such as Trinity, Potato Pro, and others), we identified companies that are sole producers of potatoes in the region which included ADRagricola and HZPC América Latina S.A. By further exploring these companies' official websites and annual reports, we found that most of the information available was related to the companies business expansion and progress in the country. However, we found no relevant information to support the estimation of the market size based on the number of growers.

Next, we examined various international resources and reports from global organizations which constantly monitor the global production and progress for various agriculture crops and vegetables per country. We expected and expected to find relevant information on the current state or prospects of potato growers in Argentina or their market share in the overall agribusiness labor force, which could help in estimating the market size from sources such as FAO, OEDC, the World Potato Congress, Exports.gov, Edeport, and others. Additionally, we sought related news articles covering the region's agribusiness news for relevant insights on the growth or current state of the potato agribusiness growers in the region are sources such as eFarm News, Agriculture In News, Merco Press, and others. The information available was on the expansion of the potato seed market by companies such as HZPC based in Buenos Aires, which is a hub for potato production and growers. The international resources also shared information on prominent agriproducts such as cereals, maize, and others but as potato has a small proportion in the agro-economy of Argentina and is ranked 25th in the global potato production, not much information was available.

Part
03
of eight
Part
03

Peru Agribusinesses Market Size: Almonds

We could not find any information about the market size for almonds in Peru whatsoever. Our research found that Peru appears to have recently entered the almond industry, which could very well explain why information is not publicly available. However, we were able to conduct a triangulated calculation, which revealed that an "other" category of countries (which logically would include Peru and certainly excludes the U.S., E.U., Australia, Turkey, and China) together account for 76.36 almond farms (value not listed in the spreadsheet because it's not specific to Peru alone).

Findings

1. The Data for Our Triangulated Calculation

  • As was mentioned above and explained in detail below, we couldn't determine the market size for almonds in Peru. However, we were able to determine the number of almond farms among an "other" category of countries, which logically would include Peru (explained below). The following findings explain how we formulated and conducted that triangulated calculation.
  • We were able to find that California has approximately 6,800 almond farms, according to the Almond Almanac 2017 citing data from the USDA Agricultural Census.
  • We were also able to find some data published by Statista about almond production by country. While no data was specific to Peru, the data enabled us to formulate a triangulated calculation because there was an "other" category of countries (list of countries not specified) which would logically include Peru (because Peru produces almonds, yet is not listed individually within the data graph).
  • That data from Statista stated that the U.S. produced 1,029,650 metric tons of almonds between 2017 and 2018. That translates to an 80.15% market share (1,029,650 metric tons (U.S. almond production) divided by 1,284,650 (global almond production, which we calculated by adding up the almond production for each country plus the "other" group of countries) multiplied by 100).
  • For our calculation, the number of California almond farms represents the number of U.S. almond farms because "California is the only place in North America where almonds are grown commercially."
  • To calculate "other" countries' collective almond production market share, we divided 11,500 ("other" countries' collective almond production, in metric tons) by 1,284,650 (global almond production, in metric tons) and multiplied that value by 100 (to covert into a percentage), which equals 0.9 (rounded to the nearest hundredth).

2. Our Triangulated Calculation

  • Our triangulated, cross calculation, in written format, was as follows: U.S. almond production is to the number of U.S. almond farms as "other" countries' collective almond production is to X (triangulated number of "other" countries' almond farms; value we were calculating for).
  • That formula, in numerical format, was as follows: 80.15 (U.S. almond production market share) / 6,800 (number of U.S. almond farms) = 0.9 ("other" countries' almond production market share) / X (triangulated number of almond farms among "other" countries collectively).
  • As such, we multiplied 6,800 by 0.9 and divided that value by 80.15, which equals 76.36 (rounded to the nearest hundredth).
  • Therefore, according to our triangulated calculation, the estimated number of almond farms among "other" countries amounted to 76.36 between 2017 and 2018.
  • As was mentioned above, it's logical to assume that Peru is included in those 76.36 almond farms because the country produces almonds, yet was not listed individually in the data graph.

Your Research Team Applied the Following Strategy:

While we were unable to find the market size for Peru's almond industry, we were able to triangulate the number of almond farms (market size) among an "other" category of countries, excluding the U.S., EU, China, Turkey, and Australia. Before deciding to formulate a triangulated calculation in order to estimate that market size value, we looked for Peru's market size specifically in three different ways. First, we looked for articles published about Peru's almond market, among sources such as the International Nut and Dried Fruit Council. Though no article stated the number of almond growers or agribusinesses in Peru, we learned that Peru is a country that's not usually known for its production of tree nuts. In that 2016 article, it was noted that Peru had "been carrying out [almond-growing] trials for two years." Due to the article's publication date, it appears that those growing trials might well have been between 2014 and 2016. Accordingly, Peru's fairly recent entry into the almond production market might very well explain why information about the number of almond growers/agribusinesses is not available with regard to the country.

For our second strategy, we tried using the Food and Agriculture Organization of the United Nation's database, which publishes data about countries' agricultural production by product. Within that database, we selected Peru and almonds, but that yielded a message saying no such data was available. As a third strategy, we searched for lists of almond-producing countries in sources such as the International Nut and Dried Fruit Council's Nuts & Dried Fruits Statistical Yearbook 2017/2018. However, within that report and others as well, Peru was not even listed. Thus, that infers that Peru is not a key player in almond production, which could very well explain why information about its market size was not publicly available. We also tried expanding the scope of our research to look for Peru's almond production quantity, in lieu of the number of growers/agribusinesses, to see if we could determine the market size that way (but to no avail). Likewise, we were unable to provide a breakdown of the number of growers based on the size of the agribusiness for Peru for these same reasons, after using these same research strategies. Accordingly, based on the complete lack of information specific to Peru throughout the entirety of our research, we decided to implement the triangulated calculation explained above in our research findings.
Part
04
of eight
Part
04

Agribusiness Financials: USA

After an extensive search through industry-related websites, government and agribusiness organizations, and industry statistic portals, data about the United States agribusiness overall rate of return, as well as its breakdown by the highest to the lowest industry performers do not appear to be available in the public domain. However, the research team was able to gather valuable insights about the contribution of the industry to the United State's economy, as well as the rate of return from current income in 2016.

RELEVANT INSIGHTS

  • In 2016, the United States Department of Agriculture (USDA) forecasted a rate of return of 1.25% for the agriculture sector from current income.
  • The total products produced by the agribusiness in the United States was valued at $388.5 billion in 2017.
  • The agribusiness industry also contributed over $159 billion in 2018, to the United States economy in export sales.
  • Foreign direct investments (FDI) into the industry was $14.1 billion in 2017.
  • In 2018, the U.S. Agriculture industry had total farm assets (physical assets and financial assets) valued at $3 trillion.
  • The total production expenses for the agribusinesses in the United States was $369.1 billion in 2018.
  • In 2018, the total gross revenue for the industry was $435.4 billion.
  • In 2017, the U.S. agribusiness industry contributed $1.053 trillion to the gross domestic product (GDP) of the U.S.; a share of 5.4%.

Research Strategy:

Initially, we commenced our research by looking for information on the overall rate of return (RoR) and the breakdown of the rate of return for the agribusiness industry in the US in various government reports such as The United States Department of Agriculture, the National Agricultural Statistics Service, the Federation of American Scientist, and also various agriculture business reports such as IBIS world, hoping that these sources provided relevant figures and data of the nation-wide rate of return. However, our findings show that most of the information on this industry was mostly focused on revenue, farm assets, and production, but nothing specific to the rate of return or investments of the agribusiness industry in the United States.

As there is no pre-compiled data on the overall rate of return and the breakdown of the rate of return for the agribusiness industry in the United States, we tried to triangulate the requested data by using rate of return formula for calculating the rate of return. We reckoned that we could use the United States' agriculture output total minus the total industry investment, then divided by the total industry investment. We searched through data sources like InvestUSA, the Economic Research Services of the United States Department of Agriculture, and Trade Economics, but could only locate information on the industry's GDP contribution and revenue. We found no data points that were specific to investments for us to calculate further.

We further tried to locate agribusiness companies in the United States such as Monsanto Company, Nutrien, DowDuPont, Deere & Company, Archer Daniels Midland Company and others to check for companies that are direct stakeholders in the industry and their rate of returns and aggregate up to estimate a rough RoR. The research team tried to locate the detailed financials of these companies to find the requested details such as investment made over a period, sales, and capital gains. However, the companies were mostly private businesses that did not publish their financial results in detail, especially concerning their investments and RoR. Owing to this limitation, the performance of these companies could not be aggregated to estimate an average RoR for the country.

As a last resort, we deep-dived into news and media coverage of the sector's finances and profitability within the United States, as well as peruse academic reports analyzing the agricultural sector. We had hoped to find reports which would include interviews of traders or producers who are part of the agribusiness value chain for insights on investments and RoR. However, the reports were either related to the production details in terms of volume or technologies and labor force conditions.


Part
05
of eight
Part
05

Agribusiness Financials: Mexico

While there is no publicly available information to fully address data regarding the overall rate of return for the agribusiness industry in Mexico and the breakdown of the rate of return for the industry, there was general information available about the agribusiness industry in Mexico. Below is an outline of the research strategies used to better understand why the information requested is publicly unavailable, as well as a presentation of our findings.

KEY RELEVANT INSIGHT ON AGRIBUSINESS IN MEXICO

  • The gross domestic products (GDP) from agriculture in Mexico increased to MXN 617,592.06 million in the second quarter of 2019 from MXN 589,837.74 million in the first quarter.
  • The GDP from agriculture in Mexico averaged MXN 464,463.56 million from 1993 until 2019, with an all-time high seen in 2018 of MXN 712,278.12 million.
  • According to the World Bank, the average value added in the agricultural sector as a percent of GDP for Mexico during the period of 1965-2018 was 6.36%; in 2018, the rate dropped to 3.34%.
  • The average value added in the agricultural sector for Mexico during the period of 1965-2018 was MXN 377.774 billion and was seen at MXN 796.225 billion in 2018.
  • Mexico saw an average annual growth of about 6%; the country is the third-largest exporter in Latin America behind Brazil and Argentina.
  • Major export crops include tomatoes, corn, coffee, and sugarcane, whereas wheat and cotton are amongst some of its most profitable crops.

ADDITIONAL INSIGHTS

  • The average return on assets for the sector was 8%. The average rate of return from income was 3%, and the average rate of return from real capital gains was 1.75 times the rate of return from current income for US Agriculture.

RESEARCH STRATEGY

The research team was unable to identify the overall rate of return for the agribusiness industry in Mexico. We were also unable to locate the breakdown of the rate of return for the agribusiness industry due to a lack of publicly available data. The reasons for this lack of detail is likely due to the fact that Mexico has built a significant agricultural-import dependence over the past 20 years. Still, to shed light on the steps the team took in coming to terms with the unavailability of information, we present our strategies below.

We started our search by looking for industry reports from MarketWatch, IBIS, PR Newswire, MarketResearch, and UNCTAD among others. The idea here was to check for the average rate of return/growth rate or investment details as these reports are most likely to report such information. Since most reports were hidden behind the paywalls, we were unable to ascertain if the reports contained the required information. We also looked through country databases like Agricultural Economic Insights’ blog, OECD, Statista, TheGlobalEconomy, and TradingEconomics, among others, in order to check if they have reported the average rate of return/growth rate or investment details as these reports mostly share such information on historical data. Although we found the Mexico GDP from agriculture, we were unable to identify the rate of return for the agribusiness industry in Mexico or the breakdown of the rate of return for the agribusiness industry in Mexico.

We also searched through media reports, press releases (e.g., Prensaescrita, LANIC, and Mexico News Daily, among others) as well as Mexico's government databases and ministerial reports (e.g., Secretary of Economy, Secretary of Agriculture, Secretary of Agrarian Development and Urban Planning). We aimed to find reports addressing the performance of the agribusiness industry in terms of the number of investments that go into this sector on an annual basis to compare it to the revenue this sector generates for the country (to derive the scale and magnitude of return). However, the government sites included information mostly limited to the agricultural production of crops and related finances rather than the sector of agribusiness. Hence, this strategy failed to yield the desired results.

The team also attempted to triangulate the information by using the formula from Investopedia for calculating the rate of return (i.e., Mexico's agriculture output total minus industry investment total divided by industry investment total multiplied by 100). We scoured through all data sources like Index Mundi and Statista, among others, to identify the required data points, but none of these sources highlighted any useful data all data was either focused on the growth rate, GDP or US agribusiness rate of return. We then attempted to find alternate data points through agribusiness companies in Mexico like AMS, Myron L. Company, GLA Agricultural Electronics, and SIGMADAF, among others. The idea here was to check for companies that are direct stakeholders of the industry and their rate of returns aggregate to form a pan-national return rate. We aimed to locate the detailed financials of these companies to find the requested details. However, the companies were mostly small private businesses that did not publish their financial results in detail. Owing to this limitation, the performance of these companies could not be aggregated to estimate an average rate of return for the country.
Part
06
of eight
Part
06

Agribusiness Financials: Ecuador

After an exhaustive search through credible sources, we were unable to determine the overall rate of return for the agribusiness industry in Ecuador.

USEFUL FINDINGS

  • Some major crops produced in Ecuador are rice, sugar, coffee, bananas, palm oil, and cacao.
  • In the absence of publicly available information on the overall rate of return for the agribusiness industry in Ecuador, the following crop-specific information was collected to get an idea on the industry.

Coffee

  • The production cost of coffee in Ecuador is around $1.91 per pound, while the international market price for commercial coffee is $1.099 per pound.
  • The international market price, or price C, reached $1.1171 per pound on June 11, 2018.
  • In Ecuador, a producer given the price C as mentioned above could have experienced a loss of about -38.7%.

Bananas

  • Although the exact rate return from a trader's perspective was not available, a farmer who invested around $300 weekly received $315 with a percentage return of ($15/$300) or 5%.
  • However, the investment would go up by $200 more if he had to invest in workers, freight, and fertilizers.

Cocoa

  • For cocoa that was sold for between $2,700 and $2,800, a producer witnessed a profit of $120.
  • According to Rubén Flores, Minister of Agriculture, Ecuador, the profit margin for cocoa producers was around 6% in 2018.

Palm

  • While the production cost of palm ranges from $125 to $135, a grower generated about $105 per ton. This indicates that the grower lost $20 to $30 on every $105 taking the lost percentage somewhere between ($20/$105) ($30/$105) (i.e., 19.05% to 28.57%).

Rice

  • While producing a block of rice cost a farmer in Ecuador $1,000, his profit was merely $250 per block, implying a margin of 25% ($250/$1,000).

Additional Insights

  • As per the latest available information for 2007-2015 (published in 2019) agribusiness in Ecuador underwent the best economic performance among all sectors. It experienced an average growth rate of 4.3% during the period, which was notably higher than the 4.1% growth rate of the country's economy.

Research Strategy:

Government sources of Ecuador

Our research began by examining ministerial reports, surveys, research studies, etc. Our sources included the Ministry of Industries and Productivity, Ministry of Commerce, Ministry of Economy and Finance, Ministry of Agriculture, (including Livestock, Aquaculture and Fisheries), etc. We aimed to find reports addressing the performance of the agribusiness industry in terms of the amount of investments that go into this sector on an annual basis. We wanted to compare it to the revenue this sector generates for the country to derive the scale and magnitude of return. However, the government sites included information mostly limited to the agricultural production of crops and related finances rather than the sector of agribusiness.

Industry Stakeholders: Agribusiness Companies

Since agribusiness companies are the direct stakeholders of the industry and their rate of returns aggregate up to form a pan-national RoR, we searched for businesses belonging to this industry and operating in Ecuador. The companies included names such as AgrOmega, Tropical Fruit Group, Soprisa, Alibana etc. We aimed to locate the detailed financials of these companies to find the requested details such as investment made over a period, sales, capital gains, etc. However, the companies were mostly small private businesses that did not publish their financial results in detail. Owing to this limitation, the performance of these companies could not be aggregated to estimate an average RoR for the country.

Insights relating to Traders or Producers

We then looked into sources that cover commerce/industrial news or news related to finance and business in any sector within Ecuador. We wanted to find reports which would include interviews of traders or producers who are part of the agribusiness value chain. We explored for their insights on the investments they make and the amount they recover from sales to understand the RoR of the business at a micro level in the value chain. Although such information was available in sources such as El Comercio, El Telegrafo, and Mongabay, the spread of the coverage was not wide enough to consider these instances as representative of the entire economy.

Academic Reports

Finally, we explored academic reports analyzing the agricultural sector of Ecuador in sources such as Researchgate, Academia, Semantic Scholar, etc. We wanted to find articles evaluating either the agribusiness industry or the agriculture industry overall, with a focus on agribusiness. We aimed to look for data revealing investments made in this sector over some time, profits made, etc. However, the reports were either related to the production details in terms of volume or technologies and labor force conditions.
Part
07
of eight
Part
07

Agribusiness Financials: Brazil

According to our triangulated calculation (explained in detail below), the overall rate of return for the agribusiness industry in Brazil was a whopping 731.9% (rounded to the nearest hundredth) in 2017/18. Furthermore, according to our additional, triangulated calculations (explained in detail below), the rates of return for the top 25%, middle 50%, and bottom 25% of agribusiness industry performers in Brazil, respectively, were 524%, 316%, and 108%.

Findings

1. Overall Rate of Return for Brazil's Agribusiness Industry

A. The Data

  • To calculate the rate of return for Brazil's agribusiness industry, the first data point we needed was the amount of money invested in the country's agriculture industry. We were able to find the total 2018 funding from Brazil's Agriculture Ministry, as part of the farm program maintained by the Brazilian government, which totaled $58 billion.
  • The second data point we needed for calculating rate of return was Brazil's total value of agricultural output in 2018. For that, we found that overall agribusiness accounted for 23.5% of Brazil's GDP in 2017 (the closest year we could find to 2018). To determine the dollar value that 23.5% equates to, we multiplied Brazil's overall GDP in 2017 ($2,053,210,000,000) by 0.235 (representing 23.5%), which equals $482,504,350,000 (Brazil's agribusiness GDP in 2017).
  • With those data points, we were then able to conduct the rate of return calculation, which is described below.

B. Rate of Return Calculation

  • The formula we used for calculating rate of return, in words, is as follows: Brazil's agriculture output total minus industry investment total divided by industry investment total multiplied by 100.
  • Accordingly, the first step of that calculation was as follows: $482,504,350,000 (Brazilian agriculture industry output total 2017) — $58 billion (industry investment) = $424,504,350,000.
  • Second, we divided $424,504,350,000 by $58 billion, which equals 7.319.
  • Lastly, we multiplied 7.319 by 100, which equals 731.9.
  • Therefore, according to our triangulated calculation, the overall rate of return for Brazil's agribusiness industry was 731.9% in 2017/18. We listed the year as 2017/18 because the calculation was based on a combination of data from 2017 and 2018.

2. Rate of Return Breakdown by Segment

A. Top 25%

  • To calculate the rate of return for the top 25% of Brazilian agribusiness industry performers, we calculated the top 25% of the GDP total, as that value was proportional to such.
  • Accordingly, the first step was to calculate the top 25% of the Brazilian agriculture industry's GDP share. To do so, we multiplied 23.5% (Brazilian agriculture's GDP share) by 0.25 (representing 25%), which equals 5.875(%). Then we subtracted 5.875% from 23.5%, which equals 17.625%
  • To determine the Brazilian GDP total for the top 25% of industry performers, we multiplied Brazil's overall GDP in 2017 ($2,053,210,000,000) by 0.17625 (representing 17.625%), which equals $361,878,262,500.
  • Next, we used the same rate of return calculation included above, but with the previously calculated GDP data corresponding to the 17.625%.
  • Accordingly, the first step of that calculation was as follows: $361,878,262,500 (Brazilian agriculture industry output total for the top 25% of industry performers 2017) — $58 billion (industry investment) = $303,878,262,500.
  • Second, we divided $303,878,262,500 by $58 billion, which equals 5.24 (rounded to the nearest hundredth).
  • Lastly, we multiplied 5.24 by 100, which equals 524.
  • Therefore, according to our triangulated calculation, the rate of return for the top 25% of Brazil's agribusiness industry performers was 524% in 2017/18.

B. Middle 50%

  • We used the same logic as we did for the top 25% in calculating the rate of return for the middle 50% of industry performers.
  • Accordingly, the first step was to calculate the middle 50% of the Brazilian agriculture industry's GDP share. To do so, we divided 23.5% (Brazilian agriculture's GDP share) by 2 (to calculate for 50%), which equals 11.75(%).
  • To determine the Brazilian GDP total for the middle 50% of industry performers, we multiplied Brazil's overall GDP in 2017 ($2,053,210,000,000) by 0.1175 (representing 11.75%), which equals $241,252,175,000.
  • For the rate of return calculation, the first step was as follows: $241,252,175,000 (Brazilian agriculture industry output total for the middle 50% of industry performers 2017) — $58 billion (industry investment) = $183,252,175,000.
  • Second, we divided ($)183,252,175,000 by ($)58 billion, which equals 3.16 (rounded to the nearest hundredth).
  • Lastly, we multiplied 3.16 by 100, which equals 316.
  • Therefore, according to our triangulated calculation, the rate of return for the middle 50% of Brazil's agribusiness industry performers was 316% in 2017/18.

C. Bottom 25%

  • We used the same logic as we did for the top 25% and top 50% in calculating the rate of return for the bottom 25% of industry performers.
  • Accordingly, the first step was to calculate the bottom 25% of the Brazilian agriculture industry's GDP share. To do so, we multiplied 23.5% (Brazilian agriculture's GDP share) by 0.75 (representing 75%, which yields the value corresponding to the bottom 25%), which equals 17.625%. Then we subtracted 17.625% from 23.5%, which equals 5.88% (rounded to the nearest hundredth).
  • To determine the Brazilian GDP total for the bottom 25% of industry performers, we multiplied Brazil's overall GDP in 2017 ($2,053,210,000,000) by 0.0588 (representing 5.88%), which equals $120,728,748,000.
  • For the rate of return calculation, the first step was as follows: $120,728,748,000 (Brazilian agriculture industry output total for the bottom 25% of industry performers 2017) — $58 billion (industry investment) = $62,728,748,000.
  • Second, we divided ($)62,728,748,000 by ($)58 billion, which equals 1.08 (rounded to the nearest hundredth).
  • Lastly, we multiplied 1.08 by 100, which equals 108.
  • Therefore, according to our triangulated calculation, the rate of return for the bottom 25% of Brazil's agribusiness industry performers was 108% in 2017/18.

Your Research Team Applied the Following Strategy:

We began our research by reviewing the rate of return formula and then looking for the data points we needed for that calculation. Our first calculation was for the overall agribusiness industry in Brazil, followed by the breakdowns by industry-performer segments. The sources that we used in compiling the necessary information included media source Reuters and financial source Country Economy, among others. The data we compiled from those sources was sufficient for us to calculate the requested values.
Part
08
of eight
Part
08

Agribusiness Financials: Argentina

According to our triangulated calculation (explained in detail below), the overall rate of return for the agribusiness industry in Argentina was -39.91% (rounded to the nearest hundredth) in 2016. Furthermore, according to our additional, triangulated calculations (explained in detail below), the rates of return for the top 25%, middle 50%, and bottom 25% of agribusiness industry performers in Argentina, respectively, were -54.93%, -69.95%, and -85.02%.

Findings

1. Overall Rate of Return for Argentina's Agribusiness Industry

A. The Data

  • To calculate the rate of return for Argentina's agribusiness industry, the first data point we needed was the amount of money invested in the country's agriculture industry. We were only able to find that data for 2016 (which is why we used that year as our metric) and the amount invested in the industry that year totaled $58 billion. For continuity, we used 2016 as the year for the remaining data points we needed.
  • The second data point we needed for calculating rate of return was Argentina's total value of agricultural output in 2016. For this, we found that agriculture accounted for 6.26% of Argentina's GDP in 2016. To determine the dollar value that 6.26% equates to, we multiplied Argentina's overall GDP in 2016 ($556.774 billion) by 0.0626 (representing 6.26%), which equals $34,854,052,400 (Argentina's agriculture GDP in 2016).
  • With those data points, we were then able to conduct the rate of return calculation, which is described below.

B. Rate of Return Calculation

  • The formula we used for calculating rate of return, in words, is as follows: Argentina's agriculture output total minus industry investment total divided by industry investment total multiplied by 100.
  • Accordingly, the first step of that calculation was as follows: $34,854,052,400 (Argentinian agriculture industry output total 2016) — $58 billion (industry investment) = -$23,145,947,600.
  • Second, we divided -($)23,145,947,600 by ($)58 billion, which equals -($)0.39906806206.
  • Lastly, we multiplied -0.39906806206 by 100, which equals -39.91 (rounded to the nearest hundredth).
  • Therefore, according to our triangulated calculation, the rate of return for Argentina's agribusiness industry was -39.91% in 2016.

2. Rate of Return Breakdown by Segment

A. Top 25%

  • To calculate the rate of return for the top 25% of Argentinian agribusiness industry performers, we calculated the top 25% of the GDP total, as that value was proportional to such.
  • Accordingly, the first step was to calculate the top 25% of the Argentinian agriculture industry's GDP share. To do so, we multiplied 6.26% (Argentinian agriculture's GDP share) by 0.25 (representing 25%), which equals 1.565(%). Then we subtracted 1.565% from 6.26%, which equals 4.695%
  • To determine the Argentinian GDP total for the top 25% of industry performers, we multiplied Argentina's overall GDP in 2016 ($556.774 billion) by 0.04695 (representing 4.695%), which equals $26,140,539,300.
  • Next, we used the same rate of return calculation included above, but with the previously calculated GDP data corresponding to the 4.695%.
  • Accordingly, the first step of that calculation was as follows: $26,140,539,300 (Argentinian agriculture industry output total for top 25% of industry performers 2016) — $58 billion (industry investment) = -$31,859,460,700.
  • Second, we divided -$31,859,460,700 by $58 billion, which equals -0.54930104655.
  • Lastly, we multiplied -0.54930104655 by 100, which equals -54.93 (rounded to the nearest hundredth).
  • Therefore, according to our triangulated calculation, the rate of return for the top 25% of Argentina's agribusiness industry performers was -54.93% in 2016.

B. Middle 50%

  • We used the same logic as we did for the top 25% in calculating the rate of return for the middle 50% of industry performers.
  • Accordingly, the first step was to calculate the middle 50% of the Argentinian agriculture industry's GDP share. To do so, we multiplied 6.26% (Argentinian agriculture's GDP share) by 0.5 (representing 50%), which equals 3.13(%). Then we subtracted 6.26% — 3.13%, which equals 3.13%
  • To determine the Argentinian GDP total for the middle 50% of industry performers, we multiplied Argentina's overall GDP in 2016 ($556.774 billion) by 0.0313, which equals $17,427,026,200.
  • For the rate of return calculation, the first step was as follows: $17,427,026,200 (Argentinian agriculture industry output total for the middle 50% of industry performers 2016) — $58 billion (industry investment) = -$40,572,973,800.
  • Second, we divided -($)40,572,973,800 by ($)58 billion, which equals -0.69953403103.
  • Lastly, we multiplied -0.69953403103 by 100, which equals -69.95 (rounded to the nearest hundredth).
  • Therefore, according to our triangulated calculation, the rate of return for the middle 50% of Argentina's agribusiness industry performers was -69.95% in 2016.

C. Bottom 25%

  • We used the same logic as we did for the top 25% and top 50% in calculating the rate of return for the bottom 25% of industry performers.
  • Accordingly, the first step was to calculate the bottom 25% of the Argentinian agriculture industry's GDP share. To do so, we multiplied 6.26% (Argentinian agriculture's GDP share) by 0.75 (representing 75%, which yields the value corresponding to the bottom 25%), which equals 4.695%. Then we subtracted 4.695% from 6.26%, which equals 1.56% (rounded to the nearest hundredth).
  • To determine the Argentinian GDP total for the bottom 25% of industry performers, we multiplied Argentina's overall GDP in 2016 ($556.774 billion) by 0.0156 (representing 1.56%), which equals $8,685,674,400.
  • For the rate of return calculation, the first step was as follows: $8,685,674,400 (Argentinian agriculture industry output total for the bottom 25% of industry performers 2016) - $58 billion (industry investment) = -$49,314,325,600.
  • Second, we divided -($)49,314,325,600 by ($)58 billion, which equals -0.8502469931.
  • Lastly, we multiplied -0.8502469931 by 100, which equals -85.02 (rounded to the nearest hundredth).
  • Therefore, according to our triangulated calculation, the rate of return for the bottom 25% of Argentina's agribusiness industry performers was -85.02% in 2016.

Your Research Team Applied the Following Strategy:

We began our research by reviewing the rate of return formula and then looking for the data points we needed for that calculation. Our first calculation was for the overall agribusiness industry in Argentina, followed by the breakdowns by industry-performer segments. The sources that we used in compiling the necessary information included Reuters (media source) and financial sources such as The Global Economy. The data we compiled from those sources was sufficient for us to calculate the requested values.


Sources
Sources

From Part 01
Quotes
  • " In all, there are upwards of 4,500, most of them small-scale growers, while the commercial units still account for 40% of the production. In the meantime, opportunities unfold for small-scale players, particularly family farms, where the apple is the flagship in diversified fruticulture."
  • "Apple growers and the fruit Produtores de maçã no Sul do Brasil Total 4.550"
Quotes
  • "The year 2016 witnessed the biggest production failure on record. On the other hand, 2017 registered the biggest Brazilian apple crop, with the unprecedented situation of Fuji outstripping the Gala variety in production volume. In 2018, we returned to the normal production levels, of about 1.1 million tons, but with a fruit profile of small size. "
  • "In Value, apples occupied the first position, with R$ 1.6 bil- lion, which corresponded to 12.49% of the total amount, down 8.56% from the pre- vious year, by virtue of higher production availability. "
Quotes
  • "This is why, ABPM - the Brazilian Association of Apple Producers has been working, since its foundation on January 31, 1978, very hard to achieve a strong leadership in the Brazilian fruit business. With 28 members, among companies, cooperatives and regional and state association, the ABPM aggregates over 4.500 producers, which represents about 90% of the Brazilian production of apples."
Quotes
  • "The apple crop has just started in Santa Catarina, but if it depends on industry estimates, it should be close to 600,000 tons. The number represents a growth of 4% compared to the last harvest, when the Santa Catarina apple trees produced 575,700 tons, according to the Brazilian Association of Apple Producers (ABPM). The weather also contributed, which adds quality to the fruit that colors and perfumes shelves throughout Brazil. "
  • "There are 12 thousand hectares planted, a range of 2.4 thousand fruit growers. In the state are 16 thousand hectares, so 75% of the planted area in Santa Catarina is here - comments. "
Quotes
  • "Total planted area for apples in Brazil in 2016 is estimated to decrease to 34,664 hectares, a 4 percent decline, as the planting of new trees is limited by the higher costs of production. "
  • "Santa Catarina continues to be the main apple-producing state in Brazil, accounting for 48 percent of total area, followed by Rio Grande do Sul with 47 percent. Brazil mainly produces three varieties of apples: Gala, Fuji and Eva."
Quotes
  • "Agroban Agroindustrial Ltda Agropecuária Schio Ltda. Agropel Agroindustrial Perazzoli Ltda. Agrospe Agro Industrial São Pedro de Vacaria Ltda. Castel Frutas Comercial Ltda. Bortolon Agrocomercial Eireli Fischer S/A Agroindústria Fruticultura Malke Ltda. Frutini - Fruticultura Aliprandini Ltda. Pomagri Frutas Ltda Rasip Alimentos Ltda. "
Quotes
  • "As a result, Brazilian agro-industrialists own 800,000 farms which occupy 75.7 percent of the nation’s agricultural land, with 62 percent of total agricultural output. Further defining the inequity, the top 1.5 percent of rural landowners occupy 53 percent of all agricultural land."
  • "In contrast, there are 4.4 million family farms in Brazil, making up 85 percent of all agricultural operations in the country. The family farm sector produces 70 percent of food consumed in the country, but does so using under 25 percent of Brazil’s agricultural land."
From Part 04
Quotes
  • "The U.S. agribusiness industry produced $388.5 billion in agricultural products in 2017."
Quotes
  • "the rate of return from real capital gains has been about 1.75 times the rate of return from current income."
  • "The 2016 USDA forecast for the rate of return from current income is 1.25%, well below the long-run average."
Quotes
  • "Farm assets include both physical and financial farm assets. Physical assets include land, buildings, farm equipment, on-farm inventories of crops and livestock, and other miscellaneous farm assets. Financial assets include cash, bank accounts, and investments such as stocks and bonds."
Quotes
  • "Agriculture, food, and related industries contributed $1.053 trillion to U.S. gross domestic product (GDP) in 2017, a 5.4-percent share. The output of America’s farms contributed $132.8 billion of this sum—about 1 percent of GDP. "
From Part 06
Quotes
  • "a warm climate, fertile soils, and proximity to ports led to large-scale production of such export crops as coffee, bananas, sugar, cacao, palm oil, and rice. "
Quotes
  • "Ecuador: the administration is the highest cost in Ecuador, a country where the production cost is already high (at USD $ 1.91 / lb, it is significantly higher than the international market price for commercial coffee of US 109.90 ¢, at 31 July 2018)."
  • "The price of coffee fluctuates over time, and this makes it difficult to calculate the exact profit margin for each country. However, on June 11, 2018, the international market price (price C) closed at USD 117.10 ¢ per pound."
  • "In Ecuador, where the cost of production is USD $ 1.91 / lb, a producer who receives the price C would have a loss of -38.7%"
Quotes
  • "The farmer says that he invests weekly at least USD 300 in freight, fertilizers, five workers, among other items. In addition, you must fight the sigatoka , a pest that leaves black streaks in the banana. “In plagues I spend USD 100 and in fertilizers, freight and workers are 200 more. But they only pay me USD 315. ” That made him have to fire the employees and ask his family to help with the cultivation."
  • "According to the National Federation of Banana Producers of Ecuador ( Fenaprope ), the official price is USD 7, 30."
  • "The farmers argue that by selling less than USD 6 just let them losses."
Quotes
  • "The first relates to high production costs , which include items such as wages and agrochemicals used in planting.. This reduces competitiveness of the local product against sugar from Colombia. The mills say they can't compete with those prices."
  • "According to the Ministry of Agriculture and Livestock (MAG), the minimum support price for the metric ton of sugarcane is USD 32.20. While the Colombian product is sold between USD 24 and USD 26."
  • "The bag of processed sugar can be found at USD 35 while that of Colombia can be found at USD 25. "
Quotes
  • "Unlike last year, the cocoa producer , especially the small and medium, currently lives better days after the recovery of the price of the quintal of the grain."
  • "Today the cocoa receives between $ 110 and $ 120 for the sale of its product, when at the beginning of the year it received between $ 70 and $ 80."
  • "Zúñiga said that cocoa started the year with an international market price of around $ 2,000 a ton, now it is between $ 2,700 and $ 2,800, which is positive for the sector, especially for the producer, who receives close of $ 120."
  • "In April, during the IV World Cocoa Conference, which was in Berlin, Germany , the Minister of Agriculture, Rubén Flores, pointed out that 72% of the profits from cocoa stays in the consuming countries, while about 6% It is for producers."
Quotes
  • "He said that for years he saw high returns – an average of $180 to $220 per metric ton of fruit – and was able to live comfortably and even hire farmhands. These high prices were attractive to many farmers in the region, convincing them to switch their operations to oil palm cultivation."
  • "But in 2012 the price of palm oil began to fall and by 2015 farmers report getting only around $80-90 per ton of fruit. They say this drop has left many of them in debt and unable to pay back their startup loans. The market didn’t begin to stabilize again until recently, reaching $130 per ton in the last months of 2017 – but for many it was too late."
Quotes
  • "Currently, the production cost of the crop is between $ 125 to $ 135, per ton, while the palm grower receives $ 105 per ton of fruit."
Quotes
  • "It's 08:00 on the last Monday of June, Roberto Romero prepares to harvest rice . Three months ago the land plowed, fangueó (made mud), sowed and four times fumigated to avoid pests."
  • "He throws numbers and says that with all that producing a block costs him $ 1,000 and he complains that his profit is only $ 250 for each block, not counting the harvester and the transport to take the rice to the pile"
  • " He went from receiving a maximum of $ 26 per bag when he produced to buy at $ 27 and $ 30 a quintal - according to quality - to sell at $ 32 and $ 35 and earn $ 5 per quintal."
Quotes
  • "Agribusiness is the economic sector that has had the best economic performance in the last 9 years, with an average growth rate in the 2007-2015 period of 4.3%, higher than the growth rate of the economy 4.1%. "
Quotes
  • "GDP From Agriculture in Ecuador increased to 1473784 USD Thousand in the first quarter of 2019 from 1445226 USD Thousand in the fourth quarter of 2018. GDP From Agriculture in Ecuador averaged 1109209.78 USD Thousand from 2000 until 2019, reaching an all time high of 1473784 USD Thousand in the first quarter of 2019 and a record low of 787431 USD Thousand in the first quarter of 2000."