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DAVID KRUSE

By Staff | Jun 3, 2011

The Greater Des Moines Partnership, Ames Chamber and Economic Development and DuPont/Pioneer sponsored a reception and banquet for Mauro Vieira, the Brazilian Ambassador to the United States at Pioneer headquarters in Johnston.

This preceded a forum on doing business in Brazil held the next day. I was notified by the Iowa Department of Economic Development that the Brazilian ambassador was coming to Iowa and the embassy had specifically requested that I be invited as the representative of Brazil Iowa Farms.

The reception for the ambassador included about 50 people including Gov. Branstad, Lt. Gov. Reynolds, Secretary of Agriculture Bill Northey and the Iowa legislature international trade committee leaders.

I was introduced to the ambassador and probably had no more than 10 minutes with him. I was surprised that their embassy knew as much as they did about our company and it was evident that they view Brazil Iowa Farms favorably.

The ambassador specifically referenced Brazil Iowa Farms in his general remarks to the banquet as something positive. We have been a good business citizen in Brazil. We have learned the rules and we follow them, believing that we needed to exceed the standards more than do many Brazilian companies to guard our reputation there.

Brazil Iowa Farms did not overcome all the trade barriers, but has adapted to them. That is how you function there. The company is a stable, well-capitalized commercial farm that is now producing well in western Bahia.

We operate 23,000 acres growing cotton, corn and soybeans, as well as operate a commercial cotton gin. We have purchased over $3 million in cotton harvesters and sprayers made in Ankeny, tractors made in Waterloo and Bauer planters also made in Iowa for our operations in Brazil.

I got to talk to several Pioneer executives at their headquarters reception for the Brazilian Ambassador recently and we talked farming in Brazil. I had toured a Pioneer seed plant there in February and so was well informed as to what Pioneer has done in Brazil.

I think our first corn crop in 2004 in Bahia yielded 75 bushels per acre. It was planted late, but that yield was typical for them there then. As Iowa corn growers, we struggled to find out what was wrong and how to fix it. We are now harvesting our 2011 corn crop.

Matthew Kruse reported to us this week that we had a 40-hectare field, 80 acres, yield 225 sacks per hectare after discounts, equivalent to 213 bpa. (Deduct 5 percent from sacks/per hectare to convert to bushel/per acre.) I believe that it was a Pioneer hybrid.

Other fields are yielding 190-200 sacks per hectare, which five years ago no one there believed possible. We had corn yields reach 180 to 190 sacks a year ago so the yield trend is continuing to improve. This is dry land production and it will be interesting to see where the yield limits are.

Bahia has a tropical climate and corn is not a tropical crop requiring temperature fluctuation between night and day for starch translocation.

Pioneer and other seed genetic companies had to adapt corn traits to the Bahia tropical climate. I can attest to the fact from our harvest result that they have been very successful in doing so.

GMO adoption is surging in Brazil as farmers want to use the technology. Pioneer and Brazil Iowa Farms are helping to feed the world, employing corn-growing biotechnology that is producing phenomenal results.

I have now participated in a 200 bpa harvest of corn on two continents. In fact, I believe that I was the first corn grower in Clay County Iowa to document a 200 bpa yield here through the Corn Growers Contest many years ago.

Next year we don’t plan on growing soybeans in Brazil, instead growing all corn in our rotation acres with cotton. I have been forewarning for some time that the next crop production that is going to explode in Brazil is corn production.

Yields are improving so much they are producing more corn on smaller-planted acreages. Currently the corn market in Bahia is limited to regional livestock use as it is 1,125 kilometers from the coast. The local price at the farm was $6.07.

The railroad, now under construction from the coast is going to change the corn market there, opening transportation to the coast to reach the export market. We are planning to build corn storage there.

If you love agriculture you love being part of something like this. The market is providing the incentive to expand corn production. Farmers around the world will respond given the resources and the weather. By 2015 there will be 375 million more middle class consumers in China, 120 million more in India and 66 million more middle class consumers in Brazil.

That is where the future growth in global commodity demand is going to come from and it cannot be met without Brazilian agriculture expanding to the challenge.

David Kruse is president of CommStock Investments Inc., author and producer of The CommStock Report, an ag commentary and market analysis available daily by radio and by subscription on DTN/FarmDayta and the Internet.

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