I started life in agriculture accompanying my father, that was in 2016, and at the time I didn't understand anything about it, it was like an obligation first, but after going many times, I gained the taste, and today I feel that I am so attached to agriculture and I swore to it, unconditional love.
A friend once asked me why I spend so much time in agriculture?
I said: there is no work without sacrifice, "the most important thing is not the time spent, but the pleasure we lose in spending that time"
Any activity that we do good or bad wastes time, more when we do it with determination we never see time passing by.
What is the best time to invest in the farm?
There is no better time to invest in the farmer, we can do it at any time, but what we must take into account are the products to be cultivated.
Agriculture is increasingly seen as a profitable investment hypothesis. Although in recent years this option has been off the investment route, the truth is that little by little this sector of the Portuguese economy is being revitalized, attracting many entrepreneurs and entrepreneurs.
An awareness of the importance of this sector is developing and even some people are already thinking of implementing an agricultural business. However, there are some aspects to be taken into account before moving towards the creation of a business in this sector of activity.
What are the costs of the farm?
In the day to day of every rural business there is the need to deal with costs and expenses, Well, investing in cost management, certainly, is an important step to increase the profitability and productivity of your farm.
And to materialize this cost is necessary:
- List all the inputs necessary to produce and services with the marketing of products.
- Computerize the quantity of each input or service according to what you intend to produce and sell.
- Assign a value closer to reality for expenses.
How does the producer benefit from the financial market?
For those who already work with agribusiness and want to invest, there is a very specific tool in the commodities market. The agricultural producer, for example, can protect himself from price variations through the Future Market and the Options Market. "Several contracts of ox, soy, corn, and coffee, the main agricultural commodities that are produced, are traded in the Stock Exchange. So, for the agricultural producer to protect himself from price fluctuations, he sells his soybeans on the Futures Market at the price he needs to pay for his production. It is possible that he does this protection through the Options Market, locking in a price defined by the producer in the Future".
Regardless of whether you are already in the market or want to start investing in the sector, the important thing is to know the business from end to end. The problem of many people who enter the sector is not to understand how the parties behave and the importance of each of the steps for the business to happen.
"In the graph above it is possible to see that the farm price is higher than BTC, ETH"
Type of culture and types of products
Before starting in the agricultural business, it is important to know what kind of culture you want to develop and in which you want to invest.
The good news is that the chances are varied, depending only on the value to be applied in this business.
It is also important to consider the types of products that will be commercialized, since there are goods of several needs, such as cereals, fruit, and vegetables. There will be situations where the demand for this kind of product may have a greater demand and others where the competition is less.
You must pay attention to the periodicity and the lifetime that the quality of the products obeys. For instance, a persimmon spoils much faster than an apple. These production details in relation to the type of product you are going to cultivate, are very important.
Production and commercialization
In the constitution of an agricultural business, another element that assumes a vital relevance is to whom these products will be produced and how they will be commercialized and sold. There are advantages either on the production level for internal consumption or for the export market.
Although the main difference lies in the way they are marketed, the secret will be to find out who intends to acquire all the products before even dedicating themselves to producing new crops. Business partnerships play an essential role here, to minimize one of the most critical factors in this type of activity: the marketing of products.
Thus, the investment in agriculture can have several application aspects, depending on the type of crops you want to work and produce. The following are some of them as reference indicators:
Goods of prime necessity
If you want to start in this business with basic necessities such as cereals, you can develop this area of activity by producing corn, wheat, oats, rye, barley, or rice. This option can be one of the most appropriate since cereals are basic components of food, consumed all over the world in addition to having prices quoted in the stock market. The rule of another is to have a large extension of land for your cultivation.
You can also direct your investment in this area to mass consumption goods such as potatoes, onions, carrots, lettuce, beans, and mushrooms.
The main advantage of growing these products is that they are the target of a great demand that is made in an intensive way. To meet this demand, their production is usually made using large greenhouses, with the main objective of maximizing production and supplying the market. In this case, the recommendation to have a large extension of land for the cultivation of these goods is not applicable
If your focus is on micro crops, such as herbs, infusion plants, and species with lower market demand, it is advisable to approach the smaller markets, which in most cases do not receive the same attention as the big markets.
Another investment idea for the agricultural business can be the bet on orchards: apple trees, orange trees, pear trees, peach trees, fig-trees. Fruit as a basic necessity is needed in a balanced diet and therefore the target of great demand and competition.
The key to success in the production of this kind of crop is to bet on the specialization of the quality of this type of fruit so that you can take better advantage of the investment made. It must therefore have very extensive land.
Why not stop investments in the sector?
While the other sectors tighten their belts so as not to suffer further losses at this time of troubled economy, we see a different reality for agribusiness. The scenario even seems to be another: of investment in one's own business.
In addition to taking advantage of the good winds of current agricultural growth, there are other reasons why investing in the area is indeed worthwhile. In the first place, it is a sector that suffers less negative impact from economic crises when compared to Industry or Goods and Services.
What to take into account when investing in agriculture
Although the scenario is quite favorable for agriculture when it comes to investing it is essential to be aware of some important points. Before making any kind of contribution to the business, the producer must establish his priorities. From them, it is possible to start the action and guarantee even greater growth.
The return on investment is one of the most relevant economic indicators in any field. It needs to be calculated and evaluated also at this time. All investments must undergo an analysis that indicates their potential financial returns.
And, when dealing with "return", it should be noted that there are different types of investment. And this not only in relation to its value but also the time it takes to present real results.
In this sense, the investment can be short, medium, or long term. The decision to invest must take into consideration that, in most cases, high investments with long-term returns are the right ones. They are usually more efficient because they ensure a more stable future for the business.
Where are the good investment demands?
But, where exactly to concentrate forces to obtain the best results at this time of agricultural growth? There are some points that deserve attention and can mean a concrete jump for business.
Increasing storage capacity can be, for example, a strategic investment that helps to expand profits. A good infrastructure system keeps cultivation close and ensures total control. Growers who invest in their own silos save on rent and can save production to sell at the best time.
Another investment with a long-term return is the focus on automation since the mechanization of production activity is increasingly necessary. Therefore, investing in modern machinery is a way to increase productivity to take advantage of the good moment of agribusiness.
In line with this, it is also fundamental to invest in technologies that ensure the optimization of processes and resources involved in the production, investments that are normally high but can behave as an exception to the rule, bringing financial returns and perceptions of value in the very short term due to the high transformation power that high value-added technologies have. Solutions focused on fuel supply and consumption management are a good example of this type of technology, not only for avoiding diesel waste or detour but also for optimizing the time of the employees involved in this control.