Iowa Farmer Today
04-29-06
Curiosity leads to opportunity
By Tim Hoskins, Iowa Farmer Today
Standing in a soybean field in Brazil, Tyler Bruch, an Emmetsburg native and
Iowa State University graduate, farms over 10,000 acres there. He farmed on
his own and now has an investment company that offers others the opportunity to
invest in his South American operation.
After reading stories about the opportunities that lay in the Southern Hemisphere,
Tyler Bruch was compelled to investigate the situation first-hand.
Eventually that curiosity led the Emmetsburg native to start farming in Bahia,
Brazil.
Bruch left room in his remaining semester at Iowa State University in 2003 to
finish his degree, while he traveled the back roads of Brazil in a rented Fiat
studying that country’s agriculture.
After his studies, both in the text book and along the countryside, he decided
Bahia was a place to farm.
The economics of starting to farm were better in Brazil, compared with Iowa,
Bruch says.
Land price is a major factor. Bruch says land in Brazil is much cheaper than in
the United States.
“Rough land” that has not been in production will cost about $300-$400 per acre,
and land that has been in production for several years will cost $600-$800/acre.
That compares with land in Bruch’s home county of Palo Alto that could sell for
as much as $3,000-$3,500/acre.
“That is a huge selling point,” he says.
Land rent is cheap by the same token. Bruch says he is planning to rent a field
next year a little more than 9 square miles for roughly $27/acre.
Bruch says South American yields on the land are close to U.S. production.
For the first few years when the land is brought into production, soybean yields
can range between 25-35 bu./acre. as that land remains in production, yields can
climb to nearly 50 bu.
Bruch says insects are the main production issue. Since Brazil does not have a
frost, there are host plants for insects year-round.
Asian soybean rust is a concern, but it can be managed fairly well with scouting
and treatment.
Bruch says Brazilian land is sandy, and will not hold moisture compared with
Iowa’s clay soils. Therefore, one of the critical factors to consider when looking
for land in Brazil is the amount and timing of rainfall.
Bruch says the legal work is similar to the United States. The landowner gets a
deed and title, just like in Iowa.
Bruch says the business culture is a little different, though.
The first challenge is learning Portuguese. The next issue is developing patience.
“Brazil will teach you patience,” he says.
For example, all businesses shut down between noon and 2 p.m. for lunch. If you
need a part for equipment, you either get it before noon or wait until after 2 p.m.
Another issue is deciding who you can trust to do business with.
“Some people you have to be careful with,” he says, but most are very honest.
However, there are agribusiness companies operating in Brazil that most Iowa
farmers are used to dealing with, such as Deere & Co., Case IH, New Holland,
Pioneer Hi-Bred and Syngenta.
Bruch, whose parents farm near Emmetsburg, says he is closer to his Deere
dealership to get parts than his parents are in Iowa.
Most people think of soybeans when they think of Brazilian agriculture. However,
Bruch says cotton is more profitable, making $325-$375/acre.
As result, he plans to plant cotton on 30 percent of his farmland next year.
Eventually, he plans to plant 60-70 percent of his farmland to cotton.
Other environmental factors, such as telecommunications and roads, often are
thought of as problems. However, Bruch says those problems are not as large as
some people think.
He says the phone system is pretty good. He has satellite Internet service at his
house and soon will have it at the farm.
There are issues with the roads. Some of the farm roads are dirt. During harvest,
a semi-truck with 62 tons of soybeans driving down a dirt road does not improve
the situation.
“It is tough to keep roads in shape when semis weighing 80 tons are driving on
them,” he says.
Bruch knows of 10 other Americans farming in his area. He estimates there are
about 190 Americans farming in Brazil.
The exact number is not known from either the United States or Brazilian
governments.
Bruch socializes with about four to five Americans in Bahia. The group typically
will get together and go out to eat about once a week or so.
For Americans interested in farming in South America, Bruch recommends they
tour for a month. He urges them to diligently study to make sure it would be the
right decision before hopping on an airplane and buying land.
He advises potential investors attend meetings and ask questions before writing
a check.
Bruch started farming for his family and then formed an investment company,
Global Ag Investments.
He wanted to make mistakes on his nickel before starting the investment
business.