In July 2007 the purchase of the farm was completed after negotiating and investigating land titles and paperwork, this is freehold land that is debt free and with a clear title.

The farm has been surveyed and registered as the 2 titles relating to the 2 areas. The price of 55 sacks of soy beans per hectare was agreed and at the date of signing one sack equals R$27.70. This equates to five payments of $192,000USD and $812USD /Ha;  $1540BRL / Ha; $1042NZD /Ha on the date of agreement.  Neighboring properties were for sale for up to 85 sacks/Ha for similar cerrado land.  We believe we negotiated a good price and excellent payment terms over 5 years.

As each deed is paid for we are able to borrow against it for further development projects if necessary.  Lines of credit for agriculture in Brazil can be awkward to negotiate; banks don’t generally lend money to buy land.

The 1188Ha(3000Ac) farm has 100Ha(250Ac) open which has been farmed for over 10 years in soy, corn, cotton and grass seed rotations.  There is approximately 290Ha (730Ac) of heavy grass and light regenerating cerrado that was cleared about 4 years ago.  The remaining 800Ha (2000Ac) is all virgin cerrado.  Of this approximately 340Ha (854Ac) will be kept as a reserve around the river and natural springs on the property. 

There is a large shed and two small houses that will be restored to good working condition. 

In late September 2008 the 100 Ha which is already open was leased to a local agribusiness for one season for 7Sc/Ha, which was a fair price. It was fertilized and planted in Soy Beans.

It can be seen in the financial budgets with a start up of $1000,000USD ($R1,750,000) the farm will prosper and end up a business worth almost $5 million USD ($R8,770,000) after 7 years.  Thereafter only future operating costs are experienced as expenditure and we can take advantage of good crop returns and favourable realestate value growth. The initial budgeting and plans are for growing Brachiaria grass for cattle, however if there is sufficient interest in soy or corn there is options for seasonal crops with sorghum or others as a second crop over the dry season instead of only a grass regime.  A herd of breeding cows will slowly be built up.  The 290Ha (730Ac) of heavy grass will not be sufficiently developed for cotton production and we believe that the 100Ha (250Ac)already open is too small to warrant the expense of growing cotton ourselves; as economy of scale suggests a minimum of 600Ha (1500Ac) is necessary for profitable cotton production.

Mixed integrated farming with intensive management strategies is the key to Nova Brazilandia’s success – “Necessary Sustainable Growth” – Simple and effective!

During December 08 and January 09 we will be removing all the old fences from previous farming attempts. Then late in the rainy season we will chain all the 744Ha of cerrado in preparation for development (provided  IBAMA has approved the permits). After the chaining we will wait for the cerrado to be sufficiently dry to get a good fire through it. Then after the fire we will begin collecting up all the usable residual wood for charcoal production. A battery of kilns will be built on site and then the collected wood will be fired into charcoal. We will work with a local charcoal expert. The sale of the product to local grain dryers and other industrial users will greatly subsidize the development costs. Currently charcoal prices are around R$150/m^3.

  If we are able to raise more money up front then larger areas can be developed earlier than envisaged and therefore higher returns sooner and faster land value appreciation.  This leads to more rapid necessary sustainable growth in an already booming region.

There can only be a maximum of 60 shareholders. Contact us for projected financial budgets to help with your decision to join and invest in Nova Brazilandia’s necessary sustainable growth.