“Studies show it would take US$ 1.8 billion investment per year, during 10 years, to eliminate storage deficit by 2030 in Brazil”
In addition to crop management, grain storage is another important factor for the farmers to guarantee profitability.
In the USA, each farmer has their own silo. In Brazil, the costs of such investment and the lack of financial resources make this a major gap.
AgriBrasilis interviewed Tadeu Vino, from Kepler Weber – post-harvest solutions company for grain processing, storage and bulk movement – about the costs of this investment and its advantages, while offering an outlook on the Brazilian situation and new technologies in the sector.
Tadeu is Commercial and Marketing Superintendent at Kepler Weber, graduated in agricultural engineering from the State University of Campinas (Unicamp).
AgriBrasilis – What is the strategic importance of storage for agro?
Tadeu Vino – Brazil’s repeated record grain harvest in recent years aligns with the world’s need for more food. Agribusiness grows, and so does the shortage of warehouses to store production. This year, storage deficit should reach around 85 million tons.
Surveys by Sectorial Chamber of Equipment for Grain Storage (CSEAG) of Abimaq, indicate a need of around US$ 1.8 billion a year, for 10 years, to correct this by 2030. We are still far from the necessary volume, despite US$ 760 million offered by the Program of Construction and Expansion of Warehouses (PCA), of the National Bank for Economic and Social Development (BNDES). Recently, Bank of Brazil and the New Development Bank (NDB) announced an understanding to allocate another US$ 280 million to build warehouses.
These initiatives show concern to stimulate post-harvest development. Farmers realized its importance and made investments with their own resources. Those that have storage are not exposed to ‘over-the-counter price’ paid at the height of the harvest, nor do they burden the country’s logistics by transporting their entire production in a short time. Also, storage protects farmers from climatic risks at harvest time. Today, less than 20% of the storage structure is near to farms. The United States and Canada have 56% and 80%, respectively.
Another fundamental point is food security. Without a place to store production, Brazil faces supply risks if there is significant crop failure.
AgriBrasilis – What is the cost of a silo? What is its durability, maintenance cost and amortization time?
Tadeu Vino – Investment in a grain processing and storage site is around US$ 129.84 to US$ 185.49 per ton stored and can be fully financed by the PCA, for example. Maximum period for payment stipulated by BNDES is 12 years. It is worth noting that storage maximizes farmer profits, which can reach 15%. Farmers can recover investment in five or six years. Well maintained, sites last more than 30 years. Kepler has direct channels to the main financial agents. We are able to help farmers raise funds for investment in grain storage fast and safely.
AgriBrasilis – How much of the harvest is stored and how much is lost due to lack of adequate storage?
Tadeu Vino – The 20/21 Brazilian harvest shall be approximately 260 million tons. Static storage capacity is of 175 million tons of grains. According to Conab, an installed capacity 20% higher than total grain production is ideal, or 312 million tons. In the 2020/21 harvest, is estimated an 85 million tons deficit, more than the 80 million tons for last year. Losses during transportation and inadequate storage are small in percentage, but when considering total value of Brazilian agribusiness, we reach important figures, which depend on post-harvest investment to be mitigated.
AgriBrasilis – Why does Brazil still has such little storage?
Tadeu Vino – Historically, farmer invested in more area through acquisition of properties. This is changing in recent years, driven by advances allowing increased production without expanding agricultural frontiers. Combined to this, farmers began to experience high global demand for food and high commodity prices. They noticed the possibility of improving earnings before production leaves the farm. Farmers gain flexibility when harvesting and leverage when selling at better prices. This changes negotiation strategies. It is a cultural change, already underway, which keeps this post-harvest market heated.
AgriBrasilis – Does Kepler Weber have any projects to encourage adherence to its technologies?
Tadeu Vino – In recent years, Kepler Weber has invested in the development of new products and in innovation. The Sync platform, developed by the company, is already being shipped in the grain processing and storage units. This makes it possible to transform post-harvest into 4.0 storage. It is an integrated system that allows farmers to have, in their hands or on their computer, all the monitoring of the plant’s operation. In practice, it makes it possible to improve energy efficiency and overall performance of storage units, reducing costs, offering greater security for customers and employees working on site. Technology is a path to the future. Kepler Weber, as a leader in the Latin American market, is committed to providing customers with a way to lead post-harvest towards innovation, as an ally of farmer’s efficiency.
AgriBrasilis – What new technologies are being developed in the sector?
Tadeu Vino – Kepler Weber just launched the KW MAX, a drying system developed to bring economic benefits to your operation, and ensure better quality of dry grains, characteristics that directly cause better gains for the producer. Also this year, the company introduced a new level sensor, with radar waves, which monitors the volume and movement of stored grain. Both the drying system and the sensor work in harmony with the control panel and the KW Cloud – Sync platform, in which data is made available and can be accessed by the farmer in real time.