Thursday, October 6, 2011

Top O'the Market to Ya: "BrasilAgro turns from farmland buyer to seller" (DBA; COWS; MOO)

Probably not the worldwide top.
Back in February we said:
We've been following this trend for the last three years and have been asked when will it top?
One sign will be when Optima Fund Management brings their American Farmland Company public, still a few years away.
Since then we posted "Stories You'll See at the Top of the Farmland Price Boom (DBA; MOO; COWS)"
about a city slicker software guy paying top buck at auction.
We're getting closer.

From Agrimoney:
BrasilAgro, which amassed some 170,000 hectares of land in less than four years, has turned seller, disposing of the first property which it bought for a price 10% higher than the start of the year.

The Brazilian cotton-to-cattle group, which is controlled by Argentine agriculture giant Cresud, sold for 580,000 bags of soybeans, equivalent to R$26.1m at current prices, Sao Pedro farm, whose acquisition five years ago kicked off the group's expansion drive.

The Sao Paulo-based company said the disposal fulfilled a company business strategy "which seeks, in addition to gains in agricultural production, the profiting of capital gains from properties sales".

While BrasilAgro did not detail the capital gain, it revealed that it had invested R$10.1m in the farm beyond the purchase price, which was struck at 488,000 sacks of soybeans, equivalent to R$11.2m at the time of the deal.

The group has developed cane stands at the 2,450-hectare farm, besides growing corn and rice.

'Very good price' 

Brazil land purchases are typically priced in bags of soybeans per hectare, a hangover from days of soaring inflation.

The sale value equates to 45 soybean bags per hectare, which a BrasilAgro spokesperson told was a "very good price".

However, the pace of appreciation appears to lag the annual rate of 21% that BrasilAgro a month ago cited for central Brazil, where Goias is situated....MORE