Application of risk solver platform to improve soybean crushing profitability

Abstract

The growing number of participants in the grain market shows just how globalized this sector is in Brazil nowadays. It is difficult to note how mergers and acquisitions between local companies as major tradings and funds have been acquiring part or even the totality of Brazilian companies, like the soybean crushing company “XYZ” that acquired some assets such as crushing plants in the state of Mato Grosso, located on the center-west region of Brazil and access to 2 port terminals to export the byproducts. This work contains data from January of 2014 to September of 2017 including prices of soybean and by products, freight rates, basis at the ports and operational costs. This information comes from different sources including government and private agencies and Thomson Reuters Eikon software. This information was used to build a model in Microsoft Excel and by using the Risk Solver Platform, a powerful statistic calculator tool, to find a solution to improve “XYZ” profitability. The results of the model suggest changes in the origin of grains, reducing the volume in some locations and increasing the volume originated in other locations. After running 2 different scenarios, “XYZ” profits was increased by 1.24 million of US dollars.

Soybean Production in the State of Maranhão and Its Relationship With the Gross Domestic Productoduct

“…In this scenario, the use of reliable sources of statistics of crops, such as the survey of Municipal Agricultural Production, is essential to understand the regional productive process, facilitating measures to direct production financing and decision-making. These statistics contain information about planted area, quantity produced, average yield, and production value of agricultural crops, which are used as indicators of production and monitoring of the economy in the short term (Rizzi;Rudorff, 2005;Sentelhas et al, 2015;Ceratti;Costa;Harris, 2019). Considering the importance and growing participation of soybean in the economy, it is essential to measure the influence of the crop in the economic context, where Gross Domestic Product (GDP) is the main indicator used to measure the economic growth of a region.…”