tools for assessing production costs · the started in 2008 organized by pecege (university of sao...
TRANSCRIPT
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Carlos Eduardo O Xavier PhD Researcher PECEGE
University of Sao Paulo
Tools for Assessing Production Costs
Ministry of Mines and Energy of Brazil
Expert Workshop for the How2Guide for Bioenergy
Biomass Resources and Bioenergy Potential in South America
Piracicaba – Brazil
November 29th, 2014.
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1. The university extension project
2. Methodology
3. Key results
4. Take-way messages
AGENDA
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Started in 2008 organized by PECEGE (University of Sao Paulo Extension Group) and 100% funded by CNA (Brazilian Confederation of Agriculture and Livestock);
Goal of create a methodology to measure and survey crop-year average costs of sugarcane, sugar and ethanol in Brazil.
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The extension project
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Adaptado de CONAB (2014) e UNICA (2014)
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Northeast
Expansion
Traditional
• Define crop-year averaged costs of 3 Brazilian production regions;
• Collect the average farmer cost in the 15 most important cane farmers unions
• Invite all the mills in the main areas of the analysis to participated of the survey
The extension project
Sugarcane
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Sample in 2014: • 1/3 of Brazillian cane production (213 million tons); • 16 of the 30 top players.
The extension project - Sample
* Subscribers of “Portal PECEGE de Informações Sucroenergéticas”
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FARMERS “PAINEL” – MEETING WITH FARMERS TO DEFINE THE “TYPICAL” FARMER
IN THE AREA ESPECIFING TECHNOLOGY, CONSUMPTION AND PRICES.
GOIATUBA - GO CATANDUVA - SP SERTÃOZINHO - SP
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Methodology
MILLS– PHONE CONTACT, FOLOWED BY QUESTIONNARY FILLED USING PECEGE’S
SYSTEMS ASSISTANCE.
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STEAM AND
ENERGY
MODULE
(R$ 60/t)
SUGAR
AND
ETHANOL
MODULE
(R$ 135/t)
Steam
and energy
Bagasse
And water
Sugar and Ethanol Electricity
Sugarcane
INDUSTRIAL PLANT INVESTIMENT (R$195/t)
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ASSUMPTIONS: Sugarcane planting is considered stable each year Mill of 2,4 million tons cane crushing capacity Linear depreciation: 30 year Opportunity cost to capital investiment: real interest rate 6% a.y.
Methodology
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LAND
PREPARATION
PLANTING
CULTIVATION AFTER PLANTING
RATOON CULTIVATION
HARVESTING AND TRANSPORTATION
4 x before replanting in the area
5 x before replanting in the area
*Management costs, working capital, assets depreciations, Farmers wage and capital cost (but land)
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CCT; 32%
Land; 22%
Others*; 15%
Ratoon Cultivation;
14%
Cultivation; 1%
Land Prep.; 4%
Planting; 11%
Cane Instalation
17%
LAND
PREPARATION
PLANTING
CULTIVATION AFTER
PLANTING
RATOON CULTIVATION
HARVESTING AND TRANSPORTATION
Methodology/Key Results
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400
150 80 80
200
100 120
1000
400 460
350
500
140 85
170
17,500
20,000
10,000
0
5,000
10,000
15,000
20,000
25,000
0
200
400
600
800
1,000
1,200
1,400
1,600SP
- A
ssis
SP -
Cat
and
uv
a
SP -
Jau
SP -
Pir
acic
aba
SP -
Ser
tão
zin
ho
PR
- J
acar
ezin
ho
PR
- P
ore
catu
Ty
pic
al M
ill
GO
- G
oia
tub
a
GO
- Q
uir
inó
po
lis
MS
- M
arac
aju
MT
- N
ov
a O
lím
pía
MG
- U
ber
aba
Ty
pic
al M
ill
AL
- M
acei
ó
PB
- J
oão
Pes
soa
PE
- R
ecif
e
Ty
pic
al M
ill
Traditional Expansion Northeast
Ty
pic
al
mil
l's
Are
a (
ha
)
Ty
pic
al
farm
ers
' A
rea
(h
a)
9 9
Only in Goiatuba and Maracaju region the typical famer share its cane production area with another crop which is soybeans in both cases and use 50% of the area
Key Results
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0
16
32
48
64
80
96
0
2
4
6
8
10
12SP
- A
ssis
SP -
Cat
and
uv
a
SP -
Jau
SP -
Pir
acic
aba
SP -
Ser
tão
zin
ho
PR
- J
acar
ezin
ho
PR
- P
ore
catu
Ty
pic
al M
ill
GO
- G
oia
tub
a
GO
- Q
uir
inó
po
lis
MS
- M
arac
aju
MT
- N
ov
a O
lím
pía
MG
- U
ber
aba
Ty
pic
al M
ill
AL
- M
acei
ó
PB
- J
oão
Pes
soa
PE
- R
ecif
e
Ty
pic
al M
ill
Traditional Expansion Northeast
ton
s o
f su
ga
rca
ne
/h
a
ton
s su
ga
r/h
a*
ton sugar/ha ton cane/ha
10 10
* The sugar production considers the use of all sugar content of cane (sucrose and other) considering the production of 0,95 ton of sugar per ton of ATR . This assumption is only possible if there is a join production of sugar and ethanol as happens in the Brazilian industry.
The average sugar production in Center-South (Traditional and Expansion) of Brazil was 10 tons of sugar/ha while in the Northeast was 6.3 tons/ha
Key Results – Productivity in 2014 (farmers)
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1/3 of cane produced by farmers get 50% discount in the price paid to harvesting and transportation services (its represent around USD 45/ton of sugar)
* The exchange rate considered was 2,15 R$/USD
241
312
334
298 295 296 290
314
215
252 239 246
248
316 313 309
393 374
0
50
100
150
200
250
300
350
400SP
- A
ssis
SP -
Cat
and
uv
a
SP -
Jau
SP -
Pir
acic
aba
SP -
Ser
tão
zin
ho
PR
- J
acar
ezin
ho
PR
- P
ore
catu
Ty
pic
al M
ill
GO
- G
oia
tub
a
GO
- Q
uir
inó
po
lis
MS
- M
arac
aju
MT
- N
ov
a O
lím
pía
MG
- U
ber
aba
Ty
pic
al M
ill
AL
- M
acei
ó
PB
- J
oão
Pes
soa
PE
- R
ecif
e
Ty
pic
al M
ill
Traditional Expansion Northeast
US
D/
ton
of
sug
ar
Cost of production (USD/ton) Price (USD/ton)
Key Results – Cost of production in 2014 (farmers)
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Key Indicators Values
sugar cane yield (ton/ha) 80
sugar content (kg of sucrose equivalent per ton) 125,77
working hours per ha 17,5
labour costs per (USD/h) USD 4,90
sugar cane price (USD/ton) USD 28,15
sugar cane seeds use (ton/ha) 15
seed costs (USD/ha) USD 514,92
harvest cost (USD/ton) USD 6,29
loading costs (USD/ton) USD 1,94
transport costs to sugar cane mil (USD/ton) USD 3,22
type of mechanisation Mechanized
harvesting and transportation contracted
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Key Results – Farmers costs
* Avegared number for 2014 considering R$/USD= 2,15
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735 831
962 967
1,302
664 723
826
1,035 1,277
0
200
400
600
800
1,000
1,200
1,400
1,600
2007/08 2008/09 2009/10 2010/11 2011/12
R$
/m³
Safra
Etanol Hidratado na região Tradicional
CT Preço
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-12% -14% -14%
6%
-3%
-12% -11% -15%
752 841
966
974
1,316 1,286 1,374
1,471
664 723 826
1035
1277 1135
1216 1253
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
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200
400
600
800
1,000
1,200
1,400
1,600
R$
/m
³
Margem CT CT Preço
Averaged annual losses of R$ 106/m³ (-9% do TC) in the last 8 crop-years. Only 50% of the cost of the investment was paid In 2013/14 crop-year electricty profits could recovery 50% of ethanol losses
Key Results Hydrated rthanol cost, price and margin evolution in Traditional region
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LOW: ↓ R$ 1.200 m³
16% of mills
31% of mills Tradictonal 11% of mills Expansion
REGULAR: R$ 1.200-1.350/m³
28% of mills
32% of mills Expansion 32% of mills Traditional
HIGH: R$ 1.350-1.500/m³
27% of mills 25% of mills Expansion 26% of mills Traditional 38% of mills Northeast
VERY HIGH: ↑ R$ 1.500/ m³
29% of mills 32% of mills Expansion 11% of mills Traditional 62% of mills Northdeast
Key Results Distribution of Ethanol cost in Brazil in 2013/14 crop-year
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735 831
962 967
1,302
664 723
826
1,035 1,277
0
200
400
600
800
1,000
1,200
1,400
1,600
2007/08 2008/09 2009/10 2010/11 2011/12
R$
/m³
Safra
Etanol Hidratado na região Tradicional
CT Preço
15
100.0
68.5
93.9 102.9
162.4
91.9
135.5
95.5
73.2 63.7 68.5 66.9
0
30
60
90
120
150
180
Bra
sil (
usi
na
SP)
Bra
sil (
pai
nel
Go
iatu
ba)
Bra
sil (
pai
nel
Ser
tão
zin
ho
)
Bra
sil (
pai
nel
Mac
eió
)
Áfr
ica
do
Su
l
Au
strá
lia
Co
lôm
bia
Tai
lân
dia
Ale
man
ha
Fra
nça
Po
lôn
ia
Ucr
ânia
Cana Beterraba
Índ
ice
de
cu
sto
ag
ríco
la d
e 1
to
ne
lad
a d
e a
çúca
r (v
alo
r b
ase
10
0 é
o c
ust
o a
grí
cola
de
usi
na
típ
ica
de
SP
)
Source: PECEGE (2010, 2013a, 2013b), Agribenchmark (2014) adapted by the author Averaged number of 2014 considering R$/USD=2,15
Key Results Sugar content agricultural cost – World Benchmark
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Take-away messages
Huge opportunity for average producers follow the best practices examples;
Reduction in costs will be deeply foster by higher productivity levels and quality of the use machines, mainly harvesters and planters;
It is highly probably that the path for lower cost practices will be long! The plans should consider the goal of a cane cycle .
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OBRIGADO!
Carlos E. O. Xavier
Phone: +55 (19) 3435-1022 Mobile: +55 (19) 98112-5860
www.pecege.esalq.usp.br/portal