South American Real Estate News

Paraguay: has specialised agriculture options in each of its farming regions

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A preliminary mapping of this country of opportunities shows a diverse and rich productive structure with cattle ranching as a fundamental pillar of the flourishing Paraguayan economy. In fact, Paraguay offers a variety of productive bets in each of its regions: the west, where most of the agricultural holdings are located and the majority of the rural population also, and the Chaco, which comprises 60% of the total territory of the country and has 2% of the total population of the country (this is where a real boom is today ).

Agriculture in the Chaco

Soybeans are the top crop in Paraguay, and it is the third country producer (after Brazil and Argentina) in areas dedicated to soybeans and is now the fourth largest exporter in the world. Large areas are also devoted to cotton, rice, maize, cassava and wheat crops. The development of high-tech agricultural production offers an opportunity in Chaco for its profitability and the possibility of taking advantage of diversification within the food industry (sorghum, for example, has adapted very well to the region ).

Livestock in the Chaco

In Chaco’s agricultural production, livestock farming is the main economic activity. Today, it is one large cattle ranch dedicated to meat and dairy production. In Chaco, market forces are causing cattle raising to increase its meat yield per hectare ( increased stock units ); which implies a greater investment and technology on the part of cattle producers. The expansion is currently takings place on native pastures rather than developed ones, but this will change.

In this region, the dry climate reduces the proliferation of and the transmission of diseases. The soil is rich in nutrients; the pastures adapt perfectly to the climate and soil. There is a great availability of land of varied sizes, soil, and rainfall index, with a cost-benefit ratio that is among the best in the world.

Due to its good mineral quality and suitable environment, land in Chaco allows higher fertility rates in the womb than usual, which means that the calving rates are higher than those of the farms in the eastern region.

Breeding and wintering

The Bajo Chaco, formed by natural pastures (the implantation of developed pastures is still limited), is mainly destined for breeding stock. The department of Presidente Hayes is the largest supplier of weaners (calves available at weaning) for wintering in Paraguay. Meanwhile, the central and northern Chaco are areas mainly destined for wintering and dairy production (in the Mennonite zone).

The areas used for pasture have been cleared and then enriched with improved pastures. In general, developed grassland implantations have not been made with pastures of the region but with improved pastures of other regions of the world. In central Chaco, it is common to use  Gatton Panic, a pasture with high palatability and fattening ability, allowing higher animal numbers per hectare and not requiring much moisture.

Cattle Herds

Of the more than 40 million hectares of the country, 26 million are dedicated to livestock, where they graze about 14 million head (with a distribution of head by regions of 60% in the eastern region and 40% in the Chaco). Although the eastern region has the largest population, the department with the most cattle is President Hayes (in the Chaco), with 2.7 million head, followed by Boquerón with 1.6 million head. As for herd growth, the average annual rate for the last five years is 6%. Under current conditions, it is estimated that the cattle herd could exceed 20 million head in 2020.

The industrial response

The current refrigeration plants have a killing capacity of 2.1 million head per year. They are qualified to export to markets such as Brazil, Argentina, Chile, Israel, Taiwan, Russia and the European Union. The country (free of foot-and-mouth disease) has a Hilton quota (superior cuts) of 1,000 tonnes per year. It is estimated that livestock contributes to the country through export, with about 1.5 billion dollars as annual income in foreign exchange.

Animal Genetics

Paraguay has a significant investment in animal genetics. There are important herds of local and specialist breeds that form the basis of national genetics. In addition, there have been several cross-breeding experiences with British and continental breeds. The country uses high-quality bovine genetics imported from the United States, Australia, Canada, and neighbouring countries.

The farm values

Despite the lower yields of the Chaco land, today, there is a flourishing demand, and they have increased in price, although still well below the region’s values. The reasons are different: the arbitration process allows producers located in the Chaco to increase their total production unit with several sales of their livestock land in the eastern region; on the other hand, the development prices of the Chaco land are much lower than the development prices of the land of the eastern region.

You may wonder why if Chaco is so prosperous, it is still almost virgin in terms of population and production. Working in the land of Chaco requires significant capital, high technical resources and permanent training. In addition, there are still some differences in infrastructure issues – roads, communications, and services – between the two regions. But the situation is defined by continuing progress as Chaco consolidates, day by day, its auspicious position: a land of opportunities.

GTSA – Paraguay

We offer investors direct ownership in one of two forms. One uses a farm-syndicated model ( multiple ownership ), and the other uses commercial ownership of single or multiple farms.

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 disposal.

www.gatewaytosouthamerica.com

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Post available in: English

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