Welcome to the Brazil AgTech Report—a weekly summary of key news and insights shaping Brazil's agrifood tech ecosystem.
In this week’s edition…
When pigs fly
Living on the edge
Firefighter cattle
Low-carbon coffee
Gas-free grazing
Juicy new frontier
H.I.G’s green leap
Money to Excel
ifood dishes out
When pigs fly…
Brazilian farmers face a range of uncertainties when planning and marketing their crops, including supply and demand, global prices, logistics costs, and volatile exchange rates. Indeed the exchange rate plays a particularly complex role, offering both benefits and drawbacks. With the Brazilian real near record lows, imported inputs like fertilizers and chemicals become more costly, but export products such as soybeans, sugar, citrus, and coffee receive higher prices in local currency. For beef, pork, and poultry producers, however, the impact is more straightforward. Most inputs are locally sourced and thus less affected by currency fluctuations, while export revenues benefit directly from a stronger dollar. As a result, Brazil's beef exports grew by over 40% last month compared to the same period last year, while pork exports grew a whopping 50% .
Living on the edge…
Last week brought some encouraging news for Agrogalaxy, as CEO Eron Martins secured agreements with fertilizer and seed producers to ensure adequate supplies for the upcoming second crop, set to be planted in the second quarter of next year. Following the judicial recovery process initiated in September, Agrogalaxy had to reduce its orders, limiting its capacity to fully meet customer demand. The company is now concentrating operations across 74 stores in nine states, focusing mainly on regions with lower climate risk. In response to mounting debts and a credit crunch, the company announced the closure of 76 stores and a workforce reduction of over 500 employees.
Firefighter Cattle…
Governor Mauro Mendes of Mato Grosso recently sparked debate by enacting the "firefighter cattle" bill, which permits cattle grazing in protected areas as a strategy to prevent natural fires. This measure comes in response to extremely hot and dry conditions this year, which have increased wildfire risks. Research from Brazil’s agricultural agency, Embrapa, suggests that grazing cattle in these areas can help reduce dry vegetation, which acts as fuel for fires if not managed. However, federal legislators remain skeptical and have given the state ten days to present its case before determining the law’s constitutionality.
Low-Carbon Coffee…
Yara, a global fertilizer producer, and Cooxupé, the world’s largest coffee cooperative, have partnered to launch a low-carbon fertilizer specifically for coffee cultivation. This initiative aims to cut the carbon footprint by up to 40% through the use of nitrogen-based fertilizers made from renewable sources. Last year, a pilot batch was provided to eight Brazilian coffee growers, with the first sales of low-carbon coffee made to Japan this year. Although high production costs currently limit widescale market adoption, increased consumer demand for eco-friendly products and economies of scale may drive broader adoption in the future.
Gas-Free Grazing…
Brazil’s Ag research agency Embrapa and Cargill have formed a strategic partnership to measure gas emissions in beef cattle production, aiming to improve sustainable practices within the sector. The study will take place at Embrapa's lab in Minas Gerais state, utilizing climate-controlled respiration chambers, an advanced technology that allows detailed analysis of greenhouse gas emissions based on various ingredients and diets. According to Cargill, this technology enables precise measurements of emitted gases and provides opportunities to test methods to reduce environmental impact.
Juicy new frontier…
Rising challenges from citrus greening disease in São Paulo, Brazil’s primary citrus-producing state, are driving efforts to diversify production geographically. Recently, the Moreira Salles Group announced an investment of over $200 million in citrus farming in Mato Grosso do Sul, to produce 8 million boxes of oranges over the next four years. This initiative bolsters Mato Grosso do Sul’s position as an emerging citrus hub in Brazil, following investments from companies like Cutrale and Junqueira Rodas, thanks to its favorable climate, productive conditions, and strict regulations against citrus greening. Meanwhile, the northeastern state of Bahia has introduced fiscal incentives to attract orange juice processing companies to source fruit from local farmers, aiming to replicate the success it achieved in the cotton industry with similar incentives.
Startup News
H.I.G.'s Green Leap…
Private equity firm H.I.G. Capital has finalized the acquisition of Brazil-based Life Agro, making its debut in the agricultural inputs market. Located in southern Brazil, Life Agro specializes in producing specialty fertilizers and adjuvants, achieving remarkable growth in recent years despite challenging market conditions. This acquisition signals a potential resurgence of private equity interest in the agricultural sector, following a tough year for local private equity firms impacted by issues with input distributors Agrogalaxy and Lavoro.
Money to Excel…
Oxygea, the corporate ventures arm of chemicals company Braskem, along with Indicator Capital, have led a $1 million round in Brazilian startup Multiledgers, focusing on blockchain solutions for carbon credit management and renewable energy certificates. Multiledgers plans to use the funds to grow its technology and commercial operations in the Renewable Energy Certification (REC) market, projected to reach $100 billion by 2030.
ifood dishes out…
Brazilian online grocery marketplace, Shopper, has raised $30 million in a new funding round led by iFood. Subject to regulatory approval, the investment supports iFood’s strategy to broaden its retail offerings, with grocery sales now accounting for 8%, or around $100 million, of Gross Merchandise Volume (GMV). Moving beyond food delivery, iFood is also positioning itself as a payments platform through its new card machine called "maquinona," which has boosted partner restaurant sales by 7% and advanced financial inclusion among small businesses.
Kieran Finbar Gartlan, an Irish expat, has been living and working in Brazil for over 30 years, mainly focused on the agricultural commodities market. He is currently Managing Partner at The Yield Lab Latam, a leading Venture Capital firm investing in early-stage agrifood tech startups. The views, opinions, and commentary expressed are solely his own.