AN UNPRECEDENTED land and beef production investment opportunity is available in the ‘best business climate in South America in 2024’ – Paraguay.

The 44,000 hectare, institutional-scale acquisition of 54,000 head of high value, grassfed brand-renowned Brangus cattle in the Chaco region of Paraguay is for sale for circa US$90 million, through Brown&Co.

This rare opportunity to purchase Estancia La Huella, one of the pre-eminent quality grazing/grass-fed beef operators in the whole of Paraguay, coincides with the country’s impressive economic growth.

Paraguay’s fast growing economy

The Central Bank of Paraguay (BCP) declared its 2024 GDP (Gross Domestic Product) forecast as 3.8pc – making Paraguay the fastest growing economy in the region ahead of Brazil, Peru and Uruguay.

At the same time, in February this year, Global Ratings Agency S&P upgraded Paraguay with a stable outlook to one notch lower than investment grade.

The country’s new President, Santiago Pena (a former senior IMF economist) has set out an ambitious policy to achieve an investment grade credit rating during his tenure.

BCP President Carlos Carvallo predicted at the end of 2023 that “a strong recovery is on the radar for livestock” as Paraguay’s fresh beef export market opened up globally. Paraguay’s export licence gained approval to Canada last year and Saudi recently – all where the beef market price is nearly double that of Paraguay.

That predicted livestock growth is being seen now with a significant increase in Paraguay’s beef exports in the first two months of 2024. A total of 50,230 tonnes, worth US$241million, was exported, marking a 7.9pc increase in volume and 12.8pc increase in income compared to the same period last year.

Compared to other countries, Paraguay also offers a beneficial climate and hugely competitive freehold land value as well as significantly lower production costs:  around 50pc lower than the US and 35pc less than in Australia.

Unique opportunity with Estancia La Huella asset

The Estancia La Huella property asset sale offers, in addition to the 44,000ha of land, a further 16,000ha of adjacent leasehold land which could be acquired, plus a further 31,000ha leasehold with established and profitable share farming operations across the region. Cattle, plant and equipment make up around US$25 million of the total sale price.

The estate, developed to a high standard over the last 15 years, specialises in high-quality Brangus beef genetics and breeding, rearing and fattening across a cell grazing production platform with a strong emphasis on sustainable, low-cost practices.

Currently La Huella produces 160kg beef/hectare (with prices circa US$3.25/kg dead weight) which rises to 188kg with the adoption of the cell grazing system across some 14,000ha currently and being and rolled out across all 27,000ha of pasture on the main holding by 2027.

Up to 10pc trading returns (earnings before interest, taxes, depreciation and amortisation) were achieved by La Huella in 2021.

With approximately 18,500ha of forest reserve, the business is well positioned to maintain and build on strong ESG practices:

• animal welfare
• low environmental impact
• highly efficient water capture and storage
• active wildlife & nature conservation programmes and
• potential for carbon sequestration.

All are very much in focus alongside highly efficient grazing practices.

The operation has recently been awarded Wildlife Conservation Society (WCS) Wildlife Friendly Farming certification – the first commercial beef grazing operation to achieve this certification in Paraguay and testament to the commitment to conservation practices and jaguar protection programme.

 

Charles Whitaker, Managing Partner with Brown&Co, said: “We consider Paraguay to be one of the globally lowest cost beef producers of quality grassfed breeding and finishing cattle.”

“Large-scale, low cost, grassfed producers such as La Huella are poised to do well in supplying higher value export markets as the reality of developed agricultural economic costs in US, Europe and Australia start to impact on volume beef producers in those regions,” he said.

“Put simply, traditional cow/calf and fattening operations with developed economy resource costs, not to mention feedlot economics and consumers views on feedlot beef, make Paraguay a sensible option for large scale, volume beef production. It also represents perhaps the closest to net zero beef production as it is possible to achieve, given the near organic nature of production practices and the circa 50pc undisturbed native scrub/forest reserve which remains in place on the Estancia under the UN REDD+ approved land development programme,” Mr Whitaker said.

“Estancia La Huella offers a unique opportunity to enter an undervalued market with significant scope to expand and a strong track record of best-in-class performance. The management team are first class and are committed to growth and profitable shareholder return.”

 

For more information contact Charles Whitaker on +44 7768 465731 or email caw@brown-co.com.

 

To register your interest and read more details about the La Huella investment opportunity, please visit: https://www.brown-co.com/services/international/property/00100-ap438477?from=interland

 

 

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