Investments suggest greater consolidation in the dairy sector in Brazil, says report by Rabobank

While the 10 largest Brazilian companies in the sector have a 33% share in the domestic market, in other countries in the region, this percentage exceeds 60%. The difference, according to the institution, makes Brazil a strategic market. "Recent Trading in the Brazilian market — including the acquisition of dairy operations of the BRF by for Lactalis, the restructuring and sale of various assets of the LBR, and the acquisition of 50% of the Itambé by Force — signaling a gradual increase in consolidation," says analyst Andrew Padilla. According to him, the small and medium-sized companies face difficulties to increase their margins and compete with large companies, which should open space for companies like for Lactalis, Nestlé, Danone and increase their slices of market.
The Bank, however, points out that the capital increase (not only in Brazil, but in all of Latin America) will require more guarantees from the Government. "If the region expects a greater global investment in the dairy sector, the public sector needs to do more to ensure better conditions for projects," says Padilla.
According to Rabobank, the Latin America responded only by 3% of the transactions of the dairy sector for the past seven years. The total applied by major international companies contrasts with sales growth of milks and derivatives in the region. In 2014, sales of Latin American countries totaled US $ 76 billion, ranking behind only the emerging markets of Asia, which reached US $ 80 billion.
In addition to the expansion of consumption of dairy products throughout the region, the Bank expects that the exchange rate devaluation will help attract more funds to the sector in Brazil. With a weaker real, it is expected that investments in dollars more attractive. Banrisul extending contracts for farmers with losses
Producers with contracts in Banrisul planted winter crops and had losses in crop, can find the Bank to request the extension of funding. The information was passed on by the Board of Directors of the Bank to the Secretary of Agriculture, Ernani Polo, in a meeting yesterday.
Banrisul has about 3 thousand operations for the winter crops, with the majority of them, about 2200, for wheat, involving Proagro, which includes 1600 operations and Pronaf, with 1500. The meeting was held with the President of Banrisul, Tulio Zamin, the Superintendent for rural business, Anderson Rostirolla and Guilherme Cassel, Director of credit.
According to the Superintendent for rural Business Bank, Anderson Rostirolla, the producer who want to pay off the debt and Pronaf can use the price guarantee program for family agriculture (Pgpaf), which guarantees you a discount of up to 25 percent of what is due, using the specified value on a monthly basis by the federal Government.
It was also informed that the farmer who didn't sell their product and marketing is having trouble, can request payment of the outstanding balance of the contract, in acquisitions of Pronaf with installment in up to three times and to the National Programme of Support to the Middle Rural producers (Pronamp) and other programs in four instalments.