South American Real Estate News

AGRIBUSINESS REPORT: Latin America from a New Zealand prospective

Post available in: English


“While some of the industries may be 20 years behind Western Countries, they’re not going to take 20 years to catch up,” said Matt Macfie, of Gallagher based in New Zealand. This epitomises the approach of the increasing number of New Zealand agricultural businesses with involvement in Latin America, many of whom deliver value propositions to the South American agricultural industry which aim to lift performance and productivity to parallel New Zealand farming standards.

The need to change the mindset of the Latin American market was a common theme among New Zealand businesses involved in the region, most of whom operate at a much higher quality level and price point than is traditional in the market. Cost-effective land and labour, but favourable environmental conditions create an opportunity to produce high-quality farming products in Latin America, without the high-cost burdens faced in other parts of the world. But things don’t happen overnight, and investing in strong distribution arrangements and farming education initiatives will be key to driving change.

NZTEAGRIBUSINESS REPORT and wider government initiatives have been supporting this drive towards Latin America, a market which offers significant potential as an emerging market leader. The New Zealand Trade Mission to Latin America last year has been followed up by a range of smaller missions and bilateral visits, which have created a platform for NZ businesses to further their involvement in the region.

Jason Barrier of Tru-Testcautions that it is important for this diplomatic and relational progress to translate into tangible gains for businesses in the region. “Certainly there is a lot more contact recently on a political and educational level, and there is a lot of talk around the “Latin American opportunity”. But to be fair, that’s nothing new. The key point is; will all this “talk” produce greater engagement of businesses between NZ and Latin America? Hopefully it will.”

Overwhelmingly, experiences in the region have been positive, with NZ companies finding the Latin American environment a relatively easy place to do business. However, that’s not to say the market does not come with its challenges, notably with regard to protectionist measures, and political and economic volatility in key markets.

“There’s huge agriculture and livestock within Argentina and Brazil,” said Matt Macfie of Gallagher. “But those two markets are probably the hardest to access due to tariffs in that region.” Even in Chile, Gallagher’s key Latin American market, Macfie cites product testing regulations as being onerous and costly. “But that’s how the Chilean market works. At some point you just have to accept that’s the process, and work around it as best you can. Where possible, NZTE can help us speed up that process or get rid of it altogether. But these are the challenges that come with exporting into these weird and wonderful places around the world.”

And this is where government and NZTE support is designed to assist businesses working on the ground in the region. Alex Turnbull of Fonterra believes the PM’s mission has opened doors for smaller players in the region, particularly in the education sector, and continues to assist Fonterra in getting access to meetings with high-level government officials in key markets.

Collaboration between NZ companies in the Latin American market will also be important, and Turnbull suggests a number of smaller projects have sprung out of the recent trips between Fonterra and other companies attending, which never would have happened had they not been on the ground together. Finally, Macfie of Gallagher cites the long-standing involvement of government officials such as Minister Tim Groser as building personal relationships which can support growth for NZ trade relationships. “Tim Groser has been doing this for 30 years, so his relationships go back three decades. While the governments may change, he’s still dealing with the same departments and the same people. Governments come and go, but the people within them normally stay.”

As Turnbull so rightly points out, “I could yabber on and PR your pants off in NZ, but fundamentally the results we release in a year’s time will be testament to the story I’ve told you today.” The Latin America story will certainly be one which is watched closely by NZ agribusiness participants in years to come.


New Zealand’s relationship with Brazil is growing, with investments, many in the dairy industry, estimated to be worth over $300m. However, in most sectors the Brazilian opportunity remains untouched. Despite a population of 200 million, and a GDP in the top 10 internationally, Brazil was ranked a mere 42nd in New Zealand’s total two-way trade statistics.

This is largely a consequence of the Latin American country’s high levels of protection, with steep tariffs on goods which compete with locally produced products. A simple export model typically will not work for NZ businesses.

However, despite the large scale of their farming operations, productivity and yields on Brazilian farms remain well below New Zealand levels. This presents significant opportunities. New Zealand innovations in genetics, pasture management systems, farm equipment and traceability systems can assist Brazilian farmers in adding value.

Companies such as Fonterra and Leite Verde are getting traction in Brazil through joint venture arrangements, or by assembling or manufacturing on the ground in Latin America.


NZ has had a long and stable relationship with Chile, with 145 of NZTE’s customers focused on the country. Similar pastoral based farming systems offers opportunities for NZ products and services in areas ranging from animal health and farm equipment, to genetics and effluent management systems. NZ and Chile are progressing co-operation in agricultural technical training, again drawing on similarities in the two countries’ environmental features to provide education in best practice farming and technology use.

A delegation was sent to the Chilean equivalent of Fieldays in Osorno earlier this year, as part of NZTE’s work to promote NZ pastoral farming expertise and agri-technology.

Technology companies and their distribution partners in Chile were able to demonstrate their products to farmers, buyers and distributors in a dedicated NZ farm technology promotion. Although a small market compared to neighbouring Argentina or Brazil, Chile ranks highest of all Latin American counties in the World Bank’s annual ease of business survey. Under the P4 Agreement, all Chile’s remaining tariffs on NZ exports will be phased out by 2017, and the country supported around $108.9 million of NZ exports in 2013.


There are significant opportunities to grow trade between Colombia and NZ, and use NZ’s expertise to build productivity and competitiveness within the Colombian agriculture sector. The cattle farming industry is developing rapidly, and farmers are keen to learn about our simple and efficient approach to farming technology. Areas in which specific opportunities have been identified include animal genetics, quality control and farm assurance systems and farm management equipment. New Zealand is also interested in promoting strategic alliances for agriculture research.

NZTE has noticed a distinct increase in two-way activity between NZ and Colombia since the PM’s Trade Mission last year. The increased stability within the country and its strong economic growth in recent years will continue to support growth for NZ companies. The number of NZTE’s customers targeting Colombia has almost doubled since last year, and continues to increase almost weekly. The second mission to Colombia, led by minister Nathan Guy earlier this year, was as a direct result of increased interest stemming from the PM’s mission.


There is increasing interest in Mexico in NZ livestock, both dairy cattle and sheep, as part of Mexico’s National Re-stock livestock programme, working with four Mexican states (State of Mexico, Hidalgo, Veracruz and Tabasco). NZTE estimates this opportunity to be valued at around $40 million. Three agricultural-related visits to NZ by Mexican delegations have taken place over the past 12 months. There is also interest from avocado producers in using NZ’s technology for producing avocado oil.

Contact the Gateway to South America team to learn about the best investment opportunities in the region. The company is a benchmark for foreign investors wishing to invest in Argentina, Brazil, Chile, Paraguay, Peru and Uruguay, providing expert advice on property acquisition and investment tours.

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Post available in: English


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