U.S. Embassy Brasilia, Brazil

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• U.S. Embassy Brasilia, Brazil
• Office of Agricultural Affairs

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A U.S. Embassy

• All Embassy Employees are Under the Supervision
  of the Ambassador or Chief of Mission.
• Most Agencies are Also Under the Supervision of
  their Respective Headquarters in the United
  States
• U.S. Embassy May Also Maintain Branches, or
  Consulates, in Cities Other than the Country's
  Capital.

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• The Key Roles of a U.S. Embassy

• Advocating and Advancing U.S. Policy Interests
• Reporting to Washington on Key Developments and
  Attitudes Within a Host Country
• Protecting the Welfare of U.S. Citizens in the
  Host Country
• Representing the President, U.S. Government and
  the American People to the Host Country and its
  People.

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• USDA OFFICES IN BRAZIL

• Office of Agricultural Affairs (FAS/Brasilia)
• Ag. Counselor, Ag. Attaché, Ag. Specialist, Ag.
  Marketing Assistant, Administrative Assistant
• U.S. Agricultural Trade Office (ATO/Sao Paulo)
• Director, Ag. Specialist, Ag. Marketing
  Specialist, Ag. Marketing Assistant,
  Administrative Assistant, Ag. Marketing Clerk
• APHIS (Brasilia) - Attaché, Agricultural
  Scientist, Administrative Assistant.
• APHIS (Recife) Veterinary Medical Officer,
  Scretary
• APHIS (Rio) - Veterinarian Pan American Health
  Organization-FMD Eradication

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• The Foreign Agricultural Service of the U.S.
  Department of Agriculture

• Two Mission Level Goals
• Expand U.S. Agricultural Export Opportunities
• Improve World Food Security

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The Foreign Agricultural Service

• Primary Responsibility for USDA Overseas
  Activities, Including
• Market Development
• International Trade Agreements and Negotiations
• Collection and Analysis of Agricultural
  Statistics and Market Information
• Administer USDA Export Credit Guarantee and Food
  Aid Programs
• Help Increase Income and Food Availability in
  Developing Nations by Mobilizing Expertise for
  Agriculturally Led Economic Growth

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• Brazil

• Larger than the Continental United States, and
  Accounts for More than Half of South America's
  Land Area
• Population and GNP are larger than the Rest of
  South America Combined
• Economic Overview
• Real Plan in 1994
• Currency Devaluation in January 1999
• Economic Growth of 4.2 in 2000 and 1.6 in 2001
• Consumer Price Inflation 6 in 2000 and 7.3 in
  2001
• 2002 Forecast 1.5 Growth and 12.5 Inflation
• 2003 Forecast 2 Growth and 12.4 Inflation

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BRAZIL
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• US-Brazil Economic Relationship

• Our 13th Largest Trading Partner
• US Direct Investment More Than Doubled from 1994
  to 2001 to 36.3 Billion
• Accounted for About Half of US Investment Stock
  in South America Last Year
• Many of the US Fortune 500 Firms Conduct Business
  with Brazil
• 4 US Companies (GM, Ford, Exxon, and Texaco) are
  Among the Top 10 Domestic Firms, and 2 US
  Financial Institutions (Citibank and BankBoston)
  are Among the Top 10 Banks.
• Top US Agribusiness Companies Include Smithfield,
  ADM, Monsanto, Bunge, Dupont, Dow Agrisciences,
  John Deere, Caterpillar, Cargill, Pioneer, and
  Walmart.

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• Brazilian Economic Events

Cruzado Novo
Cruzeiro Real
Currencies
Cruzeiro
Real
Cruzado
Cruzeiro
Inflation
Real Plan
Economic Plans
Bresser Plan
Collor Plan
Cruzado Plan
Summer Plan
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• Importance of Agriculture in Brazil

• 13 of the GDP (29 Agribusiness)
• 20 of the Labor Force
• Positive Balance of Trade of more than 20
  Billion in 2002
• Agriculture 41 of Total Exports!
• World's Largest Producer of Coffee, Sugar, Frozen
  Concentrated Orange Juice, Tropical Fruits and
  Vegetables
• Also Important Producer of Soybeans, Corn,
  Cotton, Cocoa, Tobacco, Wood Products,etc.
• World's Largest Cattle Inventory at 170 million
  head (50 Larger than the US)

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• Importance of Agribusiness to the Brazilian
  Economy

• Agribusiness employs 27 million people, which
  represents 20 percent of the labor force.
• Agribusiness is also responsible for a 29-percent
  share of the Brazilian GDP.
• MAPA estimates that Brazil encompasses 8.5
  million square kilometers (850 million hectares),
  including
• Amazon Forest 350 (million
• Cultivated Land 50 hectares)
• Breeding Pastures 150
• Virgin Land Available for Farming 90
• At least 50 of the pastures could easily be
  converted to crop production.

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• World Ranking of Agricultural Commodities
  Produced in Brazil

• Products 2002 Ranking Million Metric Tons
• Sugarcane 1st 320
• Oranges 1st 16.5
• Coffee 1st 3.5
• Soybeans 2nd 51
• Corn 2nd 36
• Beef 2nd 6.9
• Poultry 2nd 7.1
• Fruit 3rd 34
• Tobacco 3rd 0.57
• Cotton 7th 0.78

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• Brazil Value of Foreign Trade Compared with the
  Agricultural Sector

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• US-Brazil Agricultural Trade

• Brazilian Agricultural exports to the U.S. are
  More Than 6 Times Higher than U.S. to Brazil
• Primary U.S. agricultural exports to Brazil
  (CY2002 337 Million) include Wheat, Cotton,
  Feeds, Beverage Bases, Live Animals, Processed
  Fruit and Vegetables and Juices, Planting Seeds,
  Snack Foods, Hides and Skins, and Rice
• Primary Brazilian agricultural exports to the
  United States (CY2002 2.14 Billion) include
  Tobacco, Panel Products, Coffee, Lumber, Red
  Meats (Prep/Pres), Shrimp, Fruit and Veg Juices,
  Tree Nuts, and Lobster

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Balance of Agricultural Trade Between the United
States and Brazil (CY2002)
Brazil's Exports to the U.S.
U.S. Exports to Brazil
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• Agricultural Trade Issues Between the U.S. and
  Brazil

• Brazilian Concerns
• TPA and FTAA
• Tariffs in General
• U.S. Domestic Support (esp soybeans and cotton)
• Orange Juice Tariff and Tax
• Sugar Quota
• Tobacco TRQ (although it's never filled)
• SPS Requirements
• Beef (FMD/BSE)
• Poultry Meat (Newcastle's)

• U.S. Concerns
• TPA and FTAA
• Biotechnology
• Labeling
• SPS Requirements for Wheat (West Coast), Poultry
  Meat, Planting Seeds, Vegetables, Fruit,
  Meat/Dairy Plant Approvals
• Difficult to Compete with Mercosul (11 tariff
  and Merchant Marine Tax)

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Potential Changes in Agricultural Policy under
the New Administration

• Zero Hunger Program
• Food Security
• Food Distribution
• Rural Development
• Family Farms and Organic Farming
• Cooperatives
• Moratorium on Biotechnology
• Increased Environmental Protection

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US Import Tariffs on Brazils Top 20 Exports
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Brazil Hypothetical import costs for a high
value product

• FOB price of the product 1,000
• Freight and Insurance 100
• Total CIF price 1,100
  
• Bank charges (90 days/3/month) 99
• CIF cost plus bank charges
  1,199
• Landing Costs
• Import Duty (20 of the CIF) 220
• Merchant Marine Tax (25 of Ocean freight)
  25
• Port Costs (Warehousing, expediters,
• approximately 4 of import duty)
  9
• Port Labor Union Fee (2.2 of CIF)
  25
• State sales tax (ICMS. It varies by state. SP
  18 of CIF) 198
• TOTAL COST
  1,676

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• Infrastructure Indicators for Brazil and the
  United States

ERS Data
Item
Unit
Brazil
United States
Infrastructure (2000)



Total Highways
1,000 km
1,980.0
6,331.0
Paved Highways
1,000 km
184.1
3,732.8
Total Rail Track
1,000 km
27.9 (multiple gauges)
240
Navigable Waterways
1,000 km
50.0
41.0
Avg Share of Exported Grain and Oilseed moved by
Truck (1998)
Percent
40-80 (S vs. CW)
16
Weighted Average Transport Cost per 1,000 km
(1998)
/mt/1,000km
26 -43 (S vs. CW)
16
Avg Port Charges (1998)
/mt
9-12
3
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• Brazilian Soybean Production 2002/03 Forecast

World Production

• Total world soybean production 192.9 MMT
• 2 producer with 51 MMT (2002/03 harvest)

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• Soybean Production Costs and Returns U.S.,
  Brazil, and Argentina, 1998/99

ERS DATA
Cost Item (US/acre)
U.S. Heartland
Parana, Brazil
Mato Grosso, Brazil
Argentina
Variable Costs
78.59
115.14
132.06
85.34
Fixed Costs
156.32
56.95
30.01
65.71
Production Costs
234.91
172.09
162.08
151.05
Yield (bu/ac)
46
41.35
41.65
36.45
Producer Price per Bushel
5.16
4.81
4.58
4.98
Per Bushel Net Revenue
0.05
0.65
0.69
0.84
Per Acre Net Revenue
2.45
26.88
28.74
30.62
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U.S., Brazilian and ArgentineSoybean Production

• The increase in U.S. crops has lagged those in
  Brazil and Argentina
• Brazilian production has more than doubled since
  1993!
• Improved yields
• Expanded area mostly to center-west and
  northeast
• Largest soy states Mato Grosso, Parana, and Rio
  Grande do Sul

USA
Brazil
Argentina
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U.S., Brazilian, and Argentine Soybean Exports

• U.S. exports have flattened while Brazilian and
  Argentine have increased dramatically
• Brazilian exports increased 525
• Higher production
• Change in tax laws that had inhibited soybean
  exports in favor of products (Lei Kandir)

USA
Brazil
Argentina
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• Brazilian Soybean Complex Exports
• (Quantity)

Lei Kandir

• Soybean exports since 1996 have increased while
  meal and oil have been stable
• Lei Kandir and foreign restrictions on imports of
  products -- China and India

Soybean
Meal
Oil
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• Average Production and Yields
• United States, Argentina, and Brazil

Production (MMT)
Yields (MT/Ha)
ERS DATA

U.S.
Argentina
Brazil
U.S.
Argentina
Brazil
Soybean






1969-71
31.1
0.0
2.4
1.83
1.28
1.22
1989-91
52.9
11.1
18.5
2.26
2.31
1.79
1998-2000
74.1
22.4
33.9
2.55
2.52
2.53
Corn






1969-71
112.5
7.6
12.8
2.07
2.50
1.34
1989-91
172.7
6.4
26.1
3.15
3.69
1.91
1998-2000
240.4
16.1
32.8
5.28
4.32
2.53
Wheat






1969-71
39.5
6.7
0.5
2.02
1.20
0.83
1989-91
59.7
9.1
5.8
2.38
1.83
1.63
1998-2000
66.5
14.4
2.4
2.81
2.42
1.60
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• Brazilian Corn Production Continues to Fall From
  Record in 2000/01.
• Loses Acreage to Soybeans
• Imports Necessary to meet Demand

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• Brazilian Rice Consumption Exceeds Production
• Brazil Looks to Non-Mercosul Imports

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• The Brazilian Wheat Market

• On March 15, 2001 Brazil Lifted the Ban on US
  SRW, HRS, HRW
• Wheat Consumption is On the Rise in Brazil
• Imports Must Keep Up With Demand
• Brazil is the World's Largest Wheat Importer
• Brazil Relies on Imports for the Majority of its
  Consumption
• Argentina is the Primary Supplier

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• Brazilian Tobacco
• Production Exports

• At 455 TMT, 3 tobacco producer with 8 of world
  total
• At 355 TMT of exports, 1 tobacco exporter with
  18 of world market

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• U.S. Leaf Imports from Brazil

• Brazil is the Leading Source for Leaf Tobacco
  Imports and has the Largest TRQ Allocation

Brazilian U.S. Leaf TRQ
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• Brazil's Cotton Production Loses Acreage to
  Soybeans

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• Brazilian Coffee Production Exports

• 02/03 production 51.6 million bags - 1 coffee
  producer with 1/3 of world total
• 02/03 exports 28.58 million bags - 1 coffee
  exporter with nearly 1/3 of world market

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• Brazilian FCOJ Production Exports

• 02/03 FCOJ production 1.086 MMT - 1 producer
  with nearly half of world total
• 02/03 exports 1.136 MMT - 1 FCOJ exporter with
  80 of world market

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2002/03 Brazilian FCOJ Production Exports
World Production
World Exports
1.086 MMT
1.136 MMT
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• Brazilian Sugar Production Exports

• 02/03 production 22.75 MMT - 1 sugar producer
  with 16 of world total
• 02/03 exports 13.1 MMT - 1 sugar exporter with
  30 of world market

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• Brazilian Ethanol Production

• 02/03 production 12.5 billion liters - 1
  producer
• 100 ethanol from sugar cane, uses 50 of
  domestic crop
• Domestic "gasoline" is 25 ethanol
• Exports projected at 500-600 million liters

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• Brazilian Meat and Poultry Production and Exports
  Continue to Rise

Beef
Poultry
Poultry
Beef
Pork
Pork
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• Brazilian vs. US Per Capita Meat and Poultry
  Consumption

Poultry
Beef
Beef
Pork
Poultry
Pork
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• Market Access for Brazilian Fresh, Chilled, or
  Frozen Beef

• The Outbreaks of FMD in Southern Brazil in May
  2001 Further Delay Brazil's Access to the U.S.
  Market for Fresh Beef
• If/When the Brazilians Are Allowed to Export
  Fresh Beef to the United States Market, These
  Imports Will Fall under the TRQ Allocated for
  "Other Countries"
• The TRQ is Currently Fixed at 64,805 Metric Tons
  per Year on a First-Come, First-Served Basis.
• These Import Quotas Were Negotiated under the
  Uruguay Round and Will Remain in Effect Until at
  Least the next Round of the WTO Negotiations.

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• Brazil-U.S. Poultry Trade

• The Ministry of Agriculture and Food Supply Does
  Not Allow U.S. Poultry Exports to Brazil Because
  of Lack of U.S. Reciprocity in Accepting
  Brazilian Poultry
• The United States Considers Brazil a Country Not
  Free of "Newcastle" Disease
• Brazil Has Not Yet Responded to USDA/FSIS
  Questionnaires for Additional Information Sent in
  1995 and Re-Sent in 2000.
• The Brazilian Poultry Industry Complains Against
  "Unfair" Competition from the U.S.

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• Agricultural Biotechnology
• Major Challenges Facing the Brazilian Government

• Inter-Ministerial Commission Formed From Nine
  Federal Agencies to Set Policy
• Court Ruling Pending on CTNBio/RR Soybeans
• New Directive on Biotech Food Labeling (4
  Tolerance)
• New Role for CTNBio, Ministry of Health? Ministry
  of the Environment? CONAMA?
• Educating the Consumer and the Media About
  Biotech ProductsScience Based Approach Needed
• Biotech Seeds from Argentina Now Grown in Brazil
• Lack of Inspection by Federal Officials of the
  Experimental Fields with Biotech Crops

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• FAS Contacts in Brasilia

Office of the Agricultural Counselor American
Embassy SES-Av. das Nações - Quadra 801 70403-900
Brasília, D.F., Brazil Tel [phone] -
Fax [phone] E-mail AgBrasilia_at_fas.usda.go
v www.fas.usda.gov U.S. Mailing Address Unit
3500 APO AA 34030-3500
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• FAS Contacts in Sao Paulo

U.S. Agricultural Trade Office Alameda Santos
2224, 1st floor, cj 11 01418-200 São Paulo, SP,
Brazil Tel [phone] - Fax
55-11-3083-7535 E-mail ATOSaoPaulo_at_fas.usda.gov a
tobrazil_at_usdabrazil.org.br www.fas.usda.gov www.us
dabrazil.org.br U.S. Mailing Address AMCONGEN,
São Paulo Unit 3502 APO AA 34030-3502
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• Visit our Website........

www.fas.usda.gov