Brookfield’s agricultural operations encompass 665,000 acres of land, which correspond to BRL 3.5 billion in assets under management. Mainly intended for the production of grains, sugarcane and cattle breeding, these areas are distributed in the main producing states and connected to the principal Brazilian highway and railway outflow corridors.
Brookfield’s agricultural operations generated total net revenue of BRL 330 million at the end of 2018, an increase of 29% over 2017, while the EBITDA margin was 29%, a 7% increase over 2017, both reflecting the rigorous discipline to cost control and improvements in operational efficiency.
Over the past several years, Brazil has consolidated its position as the world’s leading soybean exporter in the global market. During the 2017/18 harvest period, Brazil exported 76 million tons of soybeans, an increase of 20% over the prior year.
While the 2017/18 Brazilian grain harvest declined 6% in relation to the year prior, grain production for areas under Brookfield’s management reported an increase of 19% compared to 2017.
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|2015||2016||2017||2018||% variation 2017 VS. 2018|
|Acreage under management, including environmental reserve (in thousands)||600.9||600.9||664.7||664.7||0%|
|Acreage planted under grains (in 000s)||191.7||197.6||185.8||217.9||17%|
|Acreage planted under sugarcane (in 000s)²||44.2||49.4||54.3||56.8||5%|
|Acreage dedicated to ranching (in 000s)||106.2||107.0||98.8||95.1||-4%|
|Grain production (in 000s tons)||215.3||198.2||237.2||282.3||19%|
|Sugarcane production (in 000s tons)³||363.5||270.4||274.1||303.2||11%|
|Cattle sales (in 000s head)||16.4||15.5||16.4||14.9||-9%|
1 The years refer to the harvests in which revenues were generated for each type of product
2 Acreage planted under sugarcane encompass both proprietary areas and those leased to third parties
3 Production of sugarcane covers only the production in the area comprising the group’s proprietary operation
numbers / highlights
acres of land
in assets under management
tons of grain in 2018
Forecasts for the Brazilian grain crop for 2018/19 predict an increase of approximately 6% in output after a reduction in 2018. Market estimates point to soybeans continuing to lead Brazilian agricultural output, accounting for more than 50% of expected total grain volume produced in the country.
Brookfield estimates that it will harvest 225,000 acres of grain crops for the 2018/2019 season, a year-over-year increase of 3%. This increase should occur in parallel with initiatives for increasing land productivity with projects tailored to the specific conditions of each producing unit, thereby maximizing potential output from the soil.
In spite of both low soybean prices on the international market and the 2018 nationwide truckers’ strike, Brookfield adopted a disciplined hedging strategy, which successfully ensured attractive prices for the 2018/19 crop.
Brookfield’s key priorities are to maximize productivity per acre and increase its long-term FFO yield. In this regard, Brookfield has continued to refine its operating, maintenance, and fertilizer programs based on the soil and weather characteristics at each of our farms. Brookfield is also focused on continued implementation of operational best practices, procedures and controls as well as continued best-in-class safety and environmental standards are considered and adhered to as the company expands its properties.