A preliminary mapping of this country of opportunities reveals a diverse and richly productive structure, with cattle ranching as a fundamental pillar of the flourishing Paraguayan economy. In fact, Paraguay offers a variety of productive bets in each of its regions: the west, where most of the agricultural holdings are located and the majority of the rural population also, and the Chaco, which comprises 60% of the total territory of the country and has 2% of the total population of the country (this is where a real boom is today ).
Agriculture in the Chaco
Soybeans are the top crop in Paraguay, and it is the third-largest producer (after Brazil and Argentina) of soybeans, and is now the fourth-largest exporter in the world. Large areas are also devoted to cotton, rice, maize, cassava, and wheat. The development of high-tech agricultural production offers an opportunity in Chaco for its profitability and the potential for diversification within the food industry (sorghum, for example, has adapted very well to the region).
Livestock in the Chaco
In Chaco’s agricultural production, livestock farming is the main economic activity. Today, it is one large cattle ranch dedicated to meat and dairy production. In Chaco, market forces are causing cattle raising to increase its meat yield per hectare ( increased stock units ); which implies a greater investment and technology on the part of cattle producers. The expansion is currently taking place on native pastures rather than developed ones, but this will change.
In this region, the dry climate reduces the proliferation of and the transmission of diseases. The soil is rich in nutrients; the pastures adapt perfectly to the climate and soil. There is a great availability of land of varied sizes, soil types, and rainfall indices, with a cost-benefit ratio among the best in the world.
Due to its good mineral quality and suitable environment, the land in Chaco supports higher fertility rates than usual, resulting in higher calving rates than those of farms in the eastern region.
Breeding and wintering
The Bajo Chaco, formed by natural pastures (the implantation of developed pastures is still limited), is mainly destined for breeding stock. The department of Presidente Hayes is the largest supplier of weaners (calves available at weaning) for wintering in Paraguay. Meanwhile, the central and northern Chaco are areas primarily suited to wintering and dairy production (in the Mennonite zone).
The areas used for pasture have been cleared and then enriched with improved pastures. In general, developed grassland plantings have not been made with pastures from the region but with improved pastures from other regions of the world. In central Chaco, it is common to use Gatton Panic, a pasture with high palatability and fattening ability, allowing higher animal numbers per hectare and requiring little moisture.
Cattle Herds
Of the more than 40 million hectares of the country, 26 million are dedicated to livestock, where they graze about 14 million head (with a distribution of head by regions of 60% in the eastern region and 40% in the Chaco). Although the eastern region has the largest population, the department with the most cattle is President Hayes (in the Chaco), with 2.7 million head, followed by Boquerón with 1.6 million head. As for herd growth, the average annual rate for the last five years is 6%. Under current conditions, it is estimated that the cattle herd could exceed 20 million head in 2020.
The industrial response
The current refrigeration plants have a killing capacity of 2.1 million head per year. They are qualified to export to markets such as Brazil, Argentina, Chile, Israel, Taiwan, Russia and the European Union. The country (free of foot-and-mouth disease) has a Hilton quota (superior cuts) of 1,000 tonnes per year. It is estimated that livestock contributes to the country through exports, generating about 1.5 billion dollars in annual foreign exchange income.
Animal Genetics
Paraguay has a significant investment in animal genetics. There are important herds of local and specialist breeds that form the basis of national genetics. In addition, there have been several cross-breeding experiences with British and continental breeds. The country uses high-quality bovine genetics imported from the United States, Australia, Canada, and neighbouring countries.
The farm values
Despite lower yields on the Chaco land, demand is flourishing, and prices have increased, although they are still well below the region’s values. The reasons are different: the arbitration process allows producers located in the Chaco to increase their total production unit by selling their livestock land in the eastern region; on the other hand, the development prices of Chaco land are much lower than those of the eastern region.
You may wonder why, if Chaco is so prosperous, it is still almost virgin in terms of population and production. Working in the land of Chaco requires significant capital, advanced technical resources, and ongoing training. In addition, there are still some differences in infrastructure issues – roads, communications, and services – between the two regions. But the situation is defined by ongoing progress as Chaco consolidates, day by day, its auspicious position as a land of opportunity.
GTSA – Paraguay
We offer investors direct ownership in one of two forms. One uses a farm-syndicated model (multiple ownership), and the other uses commercial ownership of single or multiple farms.
Contact the Gateway to South America team to learn about the best investment opportunities in the region. The company is a benchmark for foreign investors wishing to invest in Argentina, Brazil, Chile, Paraguay, Peru and Uruguay, providing expert advice on property acquisition and disposal.
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Founded in 2004, GTSA began as a single office in Buenos Aires. Since then, it has grown into a vibrant regional network, providing professional real estate marketing services to clients in AR, BR, CL, PY, PE, and UY.
