Paraguay: has specialised agriculture in each farming region
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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 is the top crop in Paraguay and is the third country producer (after Brazil and Argentina) in areas dedicated to soybeans and is now the fourth largest exporter in the world. There are also large areas devoted to cotton, rice, maize, cassava and wheat crops. The development of a high-tech agricultural production offers an opportunity in the Chaco, both for its profitability and for 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 fundamentally one large cattle ranch, dedicated to meat and dairy production. In the 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 size, 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 normal, which means that the rates of calving 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 to wintering and dairy production (in the Mennonite zone).
The areas used for pasture have been cleared and then enriched with the introduction of 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 the central Chaco, it is common to use Gatton Panic, a pasture with high palatability and fattening ability, which allows higher animal numbers per hectare and does not require much moisture.
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 through export, livestock contributes to the country with about 1.5 billion dollars as annual income in the field of foreign exchange.
Paraguay has a great 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 neighboring 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 values of the region. The reasons are different: the arbitration process allows producers located in the Chaco to increase their total production unit with a number of 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 the Chaco is so prosperous, it is still almost virgin in terms of both population and production. It is that to work the land of Chaco requires great capital, high technical resources and permanent training. In addition, there are still some differences in infrastructure issues – roads, communications, services – between the two regions. But the situation is defined by continuing progress as the 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 is using a farm syndicated model ( multiple ownership ) and the other commercial ownership of a 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.
Post available in: English