Today, we are gathered here for a different event, and once again, my team's creativity has really been impressive with Deise and Camila innovating. I am going to tell you what the dynamic is going to be like, because soon we will get in live through the webcast for the earnings call for the first quarter of 2027. We are going to start off presenting our earnings as we end the first quarter of our harvest year, 2026, 2027, with our presentation. It is going to be very similar to what we normally have every quarter as our earnings release, and after, we will reopen the Q&A. Since we are live and the event will go on a bit later, because we are going to talk about the market and the 20 years and different perspectives, the earnings call questions we will centralize with the analysts that cover BrasilAgro.
We have reps from all three main banks that cover the sector from the company, BTG, Itaú, XP, and I am going to be monitoring if anyone has an online question. Then we will have a break, and then we will continue with the rest of the event, where we are going to have more in-depth content as we talk about BrasilAgro and the market. After we have the initial comments, I want to once again thank you all, the team, for the organization of this event. André and Gustavo, thanks for the availability. Edu as well, thanks for being here with us as he will also talk in the second block as well. Everyone okay with the webcast? All right. I think we can start our official earnings call. Good afternoon, everyone. Here we are gathered for once again as we release our earnings at BrasilAgro.
If you have not been participating in previous sessions, we are disclosing the earnings for the first quarter of our harvest year, 2026, 2027, the beginning of our harvest period. I am here with André Guillaumon and Gustavo Lopez, our CFO and Investor Relations Director. For those of you watching in English, we also have this presentation available on the website, and you can select the interpretation icon on Zoom as well. Thank you so much once again, and we will pass the floor on to André for the beginning of our conference.
Thank you, Ana. Thank you, Deise. Thank you, Camila, and everyone. This earnings call is a little different. I was remembering actually that it has been 10 years of earnings calls, and we always have a computer and a screen and our headset, right? Today is going to be a little different. But once again, thank you so much.
We wanted to say that today we will take advantage of this moment with the call and talk about the first quarter of the company. It is a single opportunity, and it is the first opportunity. We had 20 years of a lot of stories, and so now it is just banks and numbers, right? Let us be rational here. In the first quarter, we have BRL 81 million of the net income. We were saying we are going to sell the farms, and we need to perform the sales we consider that makes sense. This was a farm we bought. It came from back then when we had that merger with Agrifirma. We had about 102 sacks of soy. We are not talking about 30 years here. We are talking about almost five years, actually, right, since we sold about 400 sacks of soy.
I think the capacity that BrasilAgro has, and we are going to talk about this in our next sections, how many transactions we have already performed. We have a very significant track record, and this sale was very important. We are not going to stop here. We will continue to be active, and I always mention that initially we diversified the company due to our productive risk, and now we are reaping the fruits of the liquidity due to this risk diversification process. No doubt in Mato Grosso, it has not been easy to sell area, but in Bahia due to irrigation and a bunch of other factors, been monetizing a few transactions. I think that was really important.
We had about BRL 95 million, and I think a concern that is very inherent to all of us, as well as you investors that have been watching our work over the past quarters, is that we can see the net debt/EBITDA ratio that with this sale, we add on about over BRL 90 million in receivables, and we are going to show you this. We bring the net debt to the company to 1.05x, net debt/EBITDA as a ratio. We have the muscles to go through difficult moments and also to maybe think about future mergers and opportunities because we have very low level of debt. This sale, we consider a level of BRL 626 million. receivables for the sale of these farms, plus these amount now. A photograph that we are going to share now. Everyone wants to know how the first quarter is doing.
Whenever I talk to the analysts and reporters, people ask about the El Niño phenomenon, but we have a harvest that so far has been very good. We have never had such an accelerated plantation process in Mato Grosso. Yesterday, we had 93% or 94% of all of Mato Grosso already planted. We were actually missing a few plots of land where it was actually our own fault, because we moved some corn areas to soy back now. We are really advancing, and it is not like the forces of nature helped us. When we started, we were saying, "What are you going to do for El Niño?" We are going to reduce the margin, or we are going to increase our operational capacity, our harvesting capacity. We are going to switch materials and that we can have a more defensive approach.
We did all of this, and rain came a little earlier this year in September. We started planting on the 15th and others on the 20th. Now we are finishing Mato Grosso, and we already have significant progress in our plantation. With this, we were able to take on a higher portion of sales of soy. We already have established plantation, and we have 57% of our future soy already sold. This is a number that we are going to get into more details about, but we know that it was a year of a lot of volatility because of elections, and we are going to show you our P&L now. We are going to tell you a little bit more about the sale of this farm. These are about BRL 51 million of net income in this farm, a IRR in reais of 26%.
It is worth mentioning, this is a farm that was acquired back in the operation in 2021. This is where we had the sale just now. There are very limited investments. A little bit of what we have been looking at is the opportunities for business in financial stress. So there was a very high level of debt in dollars, there was not much of a cash flow generation. When combined with our company, because we have more structure and muscles, we were able to achieve a very interesting transaction. Who was left in the shareholder base, which were the pension funds left in this position, were also really satisfied, as they were able to have a percentage of the company and received shares in the company as well. So it is a transaction that definitely will be an important example for the future.
We are going to talk about, there is no sale-leaseback structure here. All we have here is, there was an area that was already leased. This area was already leased out to a third farmer, and we were able to honor this contract. So it was only going to be free in 2030, but the landlord bought this size, and there is still a part of land that he is going to receive at the end of 2030 only, due to the fact that it was already previously leased out to a third party that would be a possible buyer. So there is no disguised operation. It is just an area that we are able to deliver partially now, and the other part up ahead. There is one part that is interesting. We do not want to grow as much in this area in the same year.
So from the 1,900, we are operating this amount, and we sell and receive. The third part that we are going to deliver at the end of the lease to the third person in 2030. So it is a transaction where the cash is already available. What I always say is that it is difficult. We have seen a few transactions, but not really at interesting price ranges. So, that places us in a very interesting scenario, with the possibility of us searching for these business opportunities. Just to show you a little bit of the graph of how this has been advancing. Our soy was low, and it reacted significantly. In the last few months, we did not believe in this.
We thought it was around 11.50, but there was an interesting trend, and it actually went up now, and now it is actually accommodated a bit. But we have seen the currency, considering everything that has been going on with all of the different factors, and we saw the currency go up, and it has been working on a significant composition, for Paranaguá. So for corn, we were having some variations, the last drop. Since we were able to plant very well at BrasilAgro, Mato Grosso was also planting pretty well. So we have soy in a very ideal window to have an off-season harvest in normal conditions of pressure and temperature that are even better, actually. So we are actually 15 days beforehand or early compared to last year, and the state is also really advanced compared to last year's results.
This reflex here with the corn is a bit of the expectation that we have, even with the weakening of El Niño. Then we have a strong La Niña, and people are starting to foresee some things in the sense. For corn, we've seen it advance quite a bit. Then we took on a lot of positions as well. Today, we've already reached 410. For cattle, and I think Eduardo will get into more details about this. We don't have a lot of cattle, but we really like it when it skyrockets, right? Because that creates an umbrella for all of the other types of beef, and pork, and chicken, and other animal proteins, right? We are really satisfied with this recent achievement.
The market's really underserved, and especially recently when you look at the U.S., they've slaughtered all of the cattle, so there's not available cattle. Me and Gustavo were there in the beginning of the year. If we don't have cattle available, we've seen that even Eduardo's selling cattle a lot more expensive in Paraguay than it is in Brazil. We've seen there's a big part or portion where we have maybe two or three years that are very positive in cattle raising. But let's try to be very responsible and focused on this so our health agencies can really take care of all of this so we don't have any kind of crises, right? After, we also sell cattle, and the Fazenda Preferência, so it was also interesting, right? We had, well, it's our BrasilAgro Day, but we can go over a little bit.
Anyways, what happens is, we always like selling the farm at the currency of the farmer, and this is the most intelligent way to reduce the liquidity risks, right? So, they don't have this position of having a hedge or locking in the forward with the banks that are with us, with Itaú and everyone else that performs forwards with us as well. The farmers don't really have this dynamic. What is this kind of informal hedge? They have a barter and guarantee the cost of production, and then they also have to have a hedging, which is where they buy the farm with the soy sacks, right? We like it, right? Because we get into the liquidity, we take on the operation into our P&L, and then with this, we reduce the volatility with any delinquency risks, right? So, we're going to lock this in.
If it's 200, they'll deliver this at 200. If it's 100, I'll receive it at 100, and we'll have to have the virtue, sell the soy, and sell the soy even better than those 100 or better than the 200, right? That's something we always kind of provoke. But when it comes to Preferência and why we've been looking at cattle a lot is that the only farm we sold according to the value of the cattle, right? In the past, they would talk about this a lot, right? As a type of currency, right? But we set a base value where we have a minimum, which at that time was 309, and we didn't lock in the ceiling value, right? So, if the cattle goes to 250, they have to still pay the 309.
If it goes to 450, then that's the screen value or screen price of the day. It's good for us, good for them, and we've been operating a lot of cattle derivatives due to this. It was BRL 154 million, but this year we sold cattle at BRL 309, and we now paid it off at BRL 353. You won't see We're not going to correct the farm tier, but it did come in as financial results, right? BRL 309-BRL 353. Well, I kind of skipped ethanol, but we'll talk about the bad news later on. Now what we want to show you is we're always worried about locking in the contribution margin. In this graph here, we're going to explore this a little more.
But it's a lot of volatility in agriculture, and I've worked in the fertilizer sector, and now I'm going to complete 20 years in BrasilAgro. I don't remember this much volatility in two or three years for fertilizers, right? Never in my life have I ever seen this. We've already had the war in Iraq and other conflicts, but we've never seen what we've seen now recently. This graph on the top shows you a little bit about this with the little red dots. You can see how we manage risks. First graph, that's the MAP, and that was MAP at 710. Take a look at the curve. KCL, we also bought at 354, and now they got a little more cash from Gustavo when they bought that from the previous harvest, and we went back to buying 350 at this level, right?
Companies that are capitalized with risk management can do this. The midterm as well, capital KCL. But we said originally we're not going to be fertilizing sugarcane with urea 350, so then we started fertilizing the first sugarcane that had humidity in the soil, and this would really lead to effects and make the sugarcane grow. But from May, June, or July, when there was no more humidity in the soil, we would wait on the fertilizing for soil coverage, and we were kind of buying in some more time. We didn't need to buy that much, right? Because first of all, São Paulo started raining, and we already had it fertilized. It rained in Maranhão, we had to fertilize again.
Thankfully, the time that was going to be four months became two months, and we were able to take on urea positions and do some good business. My point is, agricultural activities have become real fine line, right? It's not about- l ike, if you take on a decision to buy urea at the bottom or at the peak, and KCL is here, and you're so leveraged, there's no magic trick, right? There's not much of a logic here. A little bit lower, we can show you this exchange ratio. I always talk about this, and I tell Eduardo that when we're in a very volatile reality in the market, we have to go back to ancient Greece and see what's the best exchange ratio and think about other forms of currency. This year, we lost a bunch of our references frequently, right? Multiple times.
This is the graph we consider a lot when we consider the exchange ratios. What we did with KCL as well, we do not know if it is going to go up or down, but we think that the exchange ratio is very favorable, that is why we took on this position. It is a little bit of how we manage our cost matrix in the company. I have talked about the revenue matrix a bit, and here you have the cost matrix. Then how sugarcane has been behaving. We have very good news for sugarcane, some news that is not that good, and I will tell you a little bit about production. It has been growing significantly. We have harvested area that is really advanced compared to last year. TCH is a little better, but what do we consider as uncertainty as well?
A little bit of the sugarcane in the state of São Paulo. As you know, we have the sugarcane in Cosan, in Brotas, and we never had a July with 200 mm of rain, and Alencar knows what is going on in the entire sector. The numbers already consider that there should be 200 billion in tons, and we are going to also have an impact in sugarcane in the state of São Paulo. I was discussing this with the company in the executive committee, and we think we can deliver in the same agricultural farming year. Next year, we are going to really speed up in March. Our luck is that in this unit, we have a production ramp-up, right?
If you have a plant, at the moment when you have the sugarcane, one year it will make you harvest more, and the next year you are going to harvest less, right? That is a kind of a rule. On the other hand, we also kind of balance out the company's revenue. In my view, we can see a bit of the flow in a little bit better. We consider our GMD as well as a lot better than projected. Eduardo also sold his bad farms, and I just kept the good pastures, and he needs to deliver more beef, right? Here is a bit of our breakdown from 165 hectares of farmable land. Where is this positioned? Soy, sugarcane, corn, small pasture areas, and other crops, beans, et cetera. The status of the plantation.
68, which I mentioned about, this is the number for Mato Grosso, our five operational units in Mato Grosso. 68 is a number that considers Mato Grosso, Maranhão, Piauí, Bahia, and even São Paulo. We consider all of the regions. Then we reach 68% advances, and it seems very interesting, right? When we talked about Mato Grosso advancing, we can see that in Bahia, due to a fear of El Niño, we advanced really well in Chaparral. We have been also advancing significantly in the plantations in Chaparral. Porangatu has also been wrapping up on Wednesday. What is a little bit later or delayed in regards to other regions is Maranhão, right? We started planting about a week ago, and that is where we are a little bit delayed in our plantations.
Here you can see a little bit of what we've showed. If you see in the rear mirror, you can see the past showing us a lot. 2025 was challenging. We approved the budget with the board at BRL 6 a dollar. We finished with BRL 5.20, BRL 5.10 as a currency exchange rate. We had soy that was about BRL 10.75, which was our budgeted price. Then what we saw happen with soy, right? We finished with 2025, 2026, considering a $11 bushel. Cotton was BRL 70.34, sorry. Receivables for farms are very similar, right? Before it was kind of separate, you would sell production and not receivables. In the past few years, we've been advancing in a very similar manner, right? That's what we can expect.
What you can see in the bottom is we start off with BRL 6, we finish at BRL 5 as currency, and this is what we were able to achieve. With soy, we had an average soy of BRL 5.70. For cotton, it was BRL 6.65. Here we have one point, which is the reduction of the areas. We had a sold position, then you have a risk crop, cost of capital, et cetera, so that's reduced cotton. When we reduced our cotton, we had a lot of volatility that was intrinsic, so we considered an average price of the dollar for the cotton. Actually, normally, we already demand a bit more because the forward is like four or five months more. Four or five cents more would have to be a little more.
Anyways, we sold before, so we were able to have an average price that was better, then for farm receivables, BRL 5.58. What have we been achieving for this harvest with 95% already planted and about to grow, so 68% coming in in the company? 57% soy has already been sold at BRL 12.26. It's worth mentioning that you saw those moments where we bought fertilizers back then, and we have BRL 12.26. We have soy that sold at BRL 11, BRL 11.50, BRL 11.30. The price we've been locking in is BRL 12.26. Considering a dollar combination of BRL 5.50 up until two weeks ago was really a good deal, but now BRL 5.50 is not that good, right? If the earnings call was just two weeks ago, everyone would think it was genius. Now it doesn't seem like it so much, right? With the current events.
For budget purposes, we had achieved a BRL 5.30 dollar. That was our budget this year for this harvest that we're planting. We're already 4% or 5% above budget, but we're taking advantage of this after the week with all of the confusions going on. Gustavo and the team were able to sell at BRL 5.70. There wasn't that much liquidity, but we were able to sell part. For cotton, we have a significant part already locked in. We're considering a lot of cotton irrigated areas with 57, so it's spectacular margins. When you consider $1 BRL 5.74 for cotton, now we're considering a pivot productivity above 350 for the irrigated arroba in these areas, where the average was way above. How's it going, Mr. Norio? The prices were really good.
Farm receivables, we have had a significant amount, 65% locked in, and a currency of BRL 5.48 back then. Gustavo, you have to explain what went on with all these numbers. That is your fault.
Well, hi guys. Good afternoon, everyone. Thank you for watching us online as well. Here we are going to share the first three months. I reminded you all that this is the period from the 1st of July to the 30th of June, and here we are reporting our profits of BRL 81 million and Adjusted EBITDA of BRL 95 million. Our objective is always to consider operational results at about BRL 150 million and these farm sales at about BRL 150 million or so. This is like the base zero budget that we normally try to follow.
What we consider as a positive expectation here is through the sale of the farms, we can start unleashing a bit of the real estate aspect of the business, and we know the relevance of the real estate business in the company's earnings, and that is what makes a big difference always. Here we are also presenting the BRL 50 million here that was the sale that I was just talking about and explaining in details. The other line I think is important to mention is that during this quarter, we had a very relevant effect for the company's balance sheet, which was the price rally of soy prices with the real that was really appreciated and valued up until the 30th of June. For us, it is really important to keep up and watch the effects of this from the financial results perspective, right?
We are going to start understanding that within the financial results in the quarter, BRL 37 million positive, there is an effect what is due to the updates of amounts receivable, right? That I was mentioning. We have some liabilities that we are going to show you later on, about BRL 1 million, that considers an adjustment or correction that is especially according to CDI. It is about below 92% CDI, and there is another part of this debt which we kind of left as dollars. When we consider our net debt and we include the receivables for the farm sales, what is really important is when we face this kind of price rally, we need to try to find opportunities for derivatives, right?
Most of these earnings or results that were extremely positive financially can be explained mainly by the fact that we take advantage of these opportunities and try to lock in the receivables from farm sales, and that will help guarantee that these receivables can cover part of the debts we have in the future. Explaining this, the BRL 50 million positive for farm sales and the BRL 37 million positive that come from the financial aspects, what is missing to explain here is the operational aspect, right? We can move on maybe to the next point. What we can see here is during the first quarter, what we have seen is the entire stock that is loaded, and we really understand there are positive sales opportunities. Soy, we have already sold 54,000 tons. We still have about 25,000 tons to perform these sales during the quarter.
Now, for corn, we have 70,000 tons sold. Corn is something we always talk about as places we plant in normally are regions like Mato Grosso, where we have the obligation to consider the coverage of this area. We already know we have this opportunity cost, and we plant with the expectation of understanding how this market behaves, and from then on, understanding if we can have a good business opportunity or not. Last year, we were monitoring price productivity. This year, as we do not have this area to store this product, we have to ramp it up in the harvest period. At this moment, we were not able to achieve such positive results as we had in the previous year. Even so, we still have practically 50,000 tons still for sale, and we expect to see some good moments in this sale.
We are close to industries, ethanol, and all of this will give us a chance to have very positive results. Sugarcane is another pillar of ours for EBITDA generation in the company, and we have suffered quite a bit during this period with ATR prices that were way below what we were practicing. In June and May and July, we basically had prices that varied, where the margins were very tight in regards to what we would normally consider would have to happen, right? Now, if we have positive news, then this year we would probably not have any issues with fires, with icing, and this generated significant productivity. Our expectation is that prices will also have significant recovery in the price increments that will adjust the entire harvest.
It is a crop we have an expectation for that up until March 30, we should be presenting very positive margins, right? The BRL 150 million we talked about with EBITDA generation from an operational perspective, then sugarcane, soy, cotton, which I am going to explain later on as well, I believe we are on the right path so that all of this can happen, right? For cotton, if you have seen our results in the previous year, you probably saw that the company suffered a lot, right? We were hindered a lot because of productivity levels we had achieved in August, September 2025. But now, this year, we had a harvest with a lower surface, but it was very positive from a quality productivity perspective.
We still have not begun to commercialize these products, but we expect that we will have very positive margins due to the derivatives that we have been able to lock in. Cotton is going to be a crop that we consider in the next quarters will also contribute in a very positive way to our operational earnings and results. Here, André was talking about the importance of having this control for all of the financials in the company and the company's debts of BRL 1 billion. Especially when we consider this from a long-term perspective, these are projects that we have been in the process of execution still, such as the irrigation in Bahia, the transformation and development of almost all of the areas that the company still had to transform.
We are still missing a few surfaces within Paraguay, in the Fazenda Paraguay, and we are already looking into how we can fund this to finish the development of this surface. We consider that all of the projects and investments in the long- term, we have already initiated the returns of these cash flows for all of these operations, right? We are not concerned with the long- term. In the short- term, we decided about in the past two years, especially when we had interest rates that were way below, like 6%, 7%, we had understood that we wanted to have BRL 1 billion of our working capital cost. We preferred to use third-party capital. We understood that was a good structure. Nowadays, we do not believe in this anymore with the interest rate expectations still being really high than what the business could handle.
Our biggest expectation for the next six or seven or eight months is to reduce the short term by BRL 150 million, and we are going to be using part of the receivables of the farm sales in the cash flow to perform the payment, and we will reduce a bit of the debt level in the company. We still constantly monitor the whole set of factors, right? How much of this debt, BRL 1 billion, and what we consider as cash position, as we understand that there are also almost all of the purchases of inputs performed. 621 million reais is partially incremented by the new farm that is coming in, but also the other part is due to the rally of the soy prices that we are able to lock in partially.
When we see this debt, the EBITDA debt, we are talking about like one time, net debt/EBITDA, as a comfortable level, right? The cost of debt, as you mentioned, we understand is very competitive for the sector. That is really hindered. The biggest objectives here are I am looking at Sérgio now because he is saying we have to pay off BRL 150 million, and we are going to try to extend this long- term a little more to maybe three, four, or five years. That would be the company's challenge, but we are super comfortable with the debt level in the company. Thanks, guys.
Next. Here, just to remind you all, this year was really challenging. Normally, we have been using significant amounts of our receivables from farm sales to perform investments and the payment of dividends. This year, we understood that it would be more important to reduce the debt level in the company and redistribute a bit of our priorities, but we did not want to stop performing the payout of dividends because I think that is our commitment to shareholders. We will always be paying our dividends, and we will be paying this on 16th of November, actually, that I believe this is a small contribution, but just to demonstrate our commitment to all of you. All right, so Q&A now.
Thank you, André. Thank you, Gustavo. We will move on to Q&A. Before that, maybe we can have a quick incentive. People are going to receive dividends and shares for BrasilAgro on Black Friday, so it is a great investment, guys. Now I am going to pass the phone to Leonardo Alencar at XP.
Good afternoon, everyone, and thanks for taking my questions. This has been a year with a lot of volatility, commodities, interest, climate. I want to just take a step away from the very short- term to look at some assumptions you've always been defending, right? The idea that you can deliver the sale of farms every year. You have properties that are really well developed that have been sustaining this assumption, but the market was actually waiting on a window for the purchase of sales, right? I remember, André mentioned it would be three to five years of drops in commodities, start seeing the pricing of some land. But even with the judicial recoveries going on and the interest rate curves that maybe limited these negotiations a bit. But, André, could you talk about just a little bit?
I think this was a pleasant surprise, but what would be the scenario up ahead, right? Do you guys see any opportunities to really buy other land and maybe unleash a new phase in the company with area expansions? A lot of farmers are capitalized, so I wanted to understand a bit more.
Well, that's a very good, challenging, and intelligent question. But I think the sale is something that depends on us, that we can control. When we see there are opportunities and it makes sense, then we just achieve that, right? Now, the purchase depends on what we're going to bring into the portfolio. So prices dropped, and it's not that land hasn't dropped in prices, right? It used to be negotiated at 1,000 sacks of soy. Now the same land is worth maybe 120 sacks.
But when you consider a sack that's worth 120, it's not that we're not reaching the business opportunity, we don't have new opportunities coming up. They appear all the time, right? I was just in Mato Grosso last week with a bank looking at land. But we still have internal return on investment rates that are like 4% or 4.5%. It doesn't make sense to fund with shareholders with an actual interest rate of 10% and profit by 4.5%. What do you think will happen in the mid to long- term? Well, I think we're going to have to look at the stress, right? That's something we have done already in the past, right? Fazenda Rio do Meio, which was in financial distress. Morro Vermelho was also financial stress, and Taquari as well. So I think what you mentioned is very wise.
With the judicial recovery processes going on, people postponed this a bit. But we've also seen a very different approach. You're all in banks, and you know how many judicial recoveries have been going on every day. In the first semester of this year, we had a significant reduction, actually. So who is requesting or filing in judicial recovery from now on is going to be fair. I think in the past, there was a lot that was not fair. But from now on, it really seems like the right instrument, and the law allows you to, right? So from now on, I think these are getting a little more organized, right, as we see what comes in as a judicial recovery.
I was a little more concerned, actually, about this, because interest rates were dropping, and then I didn't buy before, and now I'm not going to buy. Then everything came in again, all over again. What's changing the liquidity is, and what's hindering farmers, is not the soy at 12. It's the interest rate. Who's leveraged won't be able to leave that condition. So with all, we actually gained an important sustaining in the interest curve that was already headed towards 11.5, and it went back to being about 15%. But I think that's where we joke about the fact that things are going to get a little tighter, because you don't see much of a positive perspective. It's not about producing or selling well. It's the interest rate that hinders you.
A company like us with a balanced debt, cheap debt, we go crazy when we have to pay BRL 80 million or BRL 90 million of interest per year, because that's capital. So, yes, we're going to get into a cycle of purchases, but it's going to be very carefully looked at. I don't think we'll have big, huge assets. We're going to have to buy smaller assets now. I was talking to Rafael about this. We had a filter of 5,000 or 6,000 hectares. Now we're looking at farms that are just 2 or 3 hectares. We know how to set up a small structure. We operate by a third party, then we have another contract to be able to sell later on. So we're looking at different formats, and what's most challenging is selling in this scenario.
But after, we'll talk about this up ahead now, and I think, I don't want to boast here, but we had 47 transactions already. So, we didn't set up a fund and just sell. We didn't sell like two farms. We already performed 47 transactions, so we're always looking for the best moment. So we're not going to just throw this at shareholders, like, "Oh, you have to buy, you have to buy." No, only if it makes sense. If the return rates goes to about 7% or 8%, great, then we'll buy. If not, we won't. Or we need to find or look for an asset with this kind of discount.
Thank you, André.
Now I'm going to pass the floor on to Guilherme from BTG.
Hi, guys. Good afternoon. Few questions here on our side. A little more on the guidance from different perspectives. First, the guidance for grains. We saw a change in areas and productivity as well, and I want to understand what's backing this up. Maybe the change in productivity is also related to the change in the land, as you've been mentioning, o r if this is a different issue. If you could talk about this a little bit. Then also about the sugarcane guidance, if you could talk about that. The sugarcane guidance says that from now on, in the rest of the harvest, the harvest would have to be very similar to the previous quarter, but in your different land areas, normally rain is going to be more intensified up ahead, in the next few months. So how comfortable are you about this guidance, and how was this harvest in October with the month that's already finished, from this quarter?
Well, the first question, I'll give you a spoiler in the next BrasilAgro Day. Let's start off with your second question, first about sugarcane, and then we'll talk about productivity. So in sugarcane, let's be tactical. We have 2 million to harvest. We have maybe 1.2 million at São José and Maranhão. Maranhão in October was the biggest all-time high. We never harvested that much sugarcane. We overcame 210,000 tons in this operation in the month of October. So Maranhão did really well. Taquari in Mato Grosso, we finished our harvest already, our harvesting period. Probably around the 14th or 15th of October, we finished, and that's done. Now we are in São Paulo with about 400,000 tons, and we're still missing about 160, 170 to be harvested. In Maranhão, as we've been performing, we're harvesting about 7,500, 7,600 tons per day.
In São Paulo, we have about 3,500. Now we have another harvest initiative, 3,300, 3,500, and that's where we're focused. So the guidance for harvest, I think in Maranhão, we're going to finish that in our production plant. We're going to extend a bit of the period for the processing. We were planning to finish by the end of November, but I think it's going to go on till about the 15th. We're already considering the efficiency adjustments of 30 days of harvesting in September in Maranhão, but 30 days of harvesting in November is completely different, right? So when we talk about all this, we're already adjusting the efficiency for November to about 70%. When we consider September's efficiency, it's like 95%, right? So we already adjusted all that, and I don't think we're going to have any issues. Then in São Paulo, there's no way out.
We're going to have to operate. It's hard to say this. If November helps, then it's going to be lower. The plant we delivered when we spoke with Cosan and Raízen, sorry, Cosan. We've already aligned with them that the end of the harvest should be the 20th of December. The plant also has a lot of sugarcane that was delayed. Everyone's kind of in the same boat, but we should have a little bit of sugarcane left behind, and we'll try to accelerate and harvest in the beginning of our harvest period. The first question is, we're going to tell you just a little spoiler of what we've been doing, and you've been hearing us talk about. But I always say that things are becoming more disruptive. So we experienced major revolutions in agriculture, right? We had the green nitrogen fertilizing, then we had hybrid materials.
The world didn't really have hybrids. Corn and wheat was all. None of it was hybrid. Then we had the leap of productivity with GMOs, biologicals, with chemicals, intensifying the chemical molecules. All of these helped productivity, but now we have the IoT, right, the Internet of Things, in the production units. We're going to show you a bit of the level we have achieved in our units, and we have. It's not a very complex challenge, right, because in the past we reached 81% already of all of our operations that were mapped out with telemetry. So we reached 81% of everything, and I'm talking about 1.1 million hectares monitored. We don't plant 1,150,000 tons, but you plan and you have the sum of all of this with 1.1 million, and then 81% of our operations are monitored by telemetry.
Now we have an objective of reaching 90%, and I believe we will achieve this. Why are we telling you this? Because we start seeing things we never imagined we would be able to look at. When Embrapa was saying you had 10% potential to increase your agricultural GDP with these tools, I thought about this and I believed in it, but not that much, right? We are seeing this in practical terms, right? It is a reality now. We used to spend about 0.9 L of diesel to be able to operate a hectare of land. With telemetry, we monitored idle capacity, transportation capacity. That dropped to 0.55. Almost 35% savings in diesel. This is 35% in an operation that does not spend much, right? For plantation, we would historically spend about 12 L of diesel oil.
Now we spend 9 L of diesel per hectare in the plantation. For harvesting, 14 L of diesel per hectare. Now, we are spending about 10 L per hectare. Why? What are you doing? Well, it is just about getting to you and saying, "Look, you are going to operate with your car, but you are not going to go over 2,500 rotations." We limit the guy's machine, and that generates a warning, that generates speed warnings. There is a lot of cash just with managing these kind of operations with telemetry. Actually, we were just talking about the application of variable rates with KCL, and we have a potential to capture another 8 million with the application of the variable sodium chloride, sorry, and potassium chloride. When we consider this, what changed? Well, up until then, we only talked about costs, but what changed in productivity?
What changed was that humans, unfortunately, that is how we are, they need to see. They have to feel like they are constantly monitored. I am monitored by the board, by SOX, by CVM, by everyone. The driver wasn't monitored by anyone, because the guy would just send him there, he would come back at the end of the day, and that is it. Now what happens is that we are having a full-time Big Brother session, right? Like, "Hey, you are rushing too much. Stop. Take your foot off the accelerator. Look, you are missing this line," or, "You missed that." I will give you an example with, "Look, tractor such and such, stop that," because they have a monitor there, and the system was saying, "Look, line 37 is not. Seeds are not dropping there," right?
You go back and you can operate with the root cause, and that, no doubt, and the choice of things and the way we are doing things, after we will share a bit of this, and whoever wants to look at this in more details, you can go and visit us and we will schedule a session, and you can look at all of the tools. You can find the. All of the information we are generating is going to be important to help artificial intelligence. This productivity has been coming very quickly, and the association of biological controls and all of this has lowered at very cheap prices. It is really an important reason to have both associated, and I always believed that that would bring in fruits in the mid to long- term. Then you have the molecule lasting longer.
Chemical industry develops this molecule, and then after two years, it doesn't control this anymore. Now the company spends the $6 billion, and then after a certain period of years, the patents are going to expire, and then they'll move on to the market in a much cheaper way. That's an important gain, right? I think there's a lot going on, and you'll see a bit of this in the next event here. But I think everyone's closely watching in real time, and managers are receiving reports that are a lot more detailed at all times, in real- time on their apps. There's WhatsApp groups with information about how each of the machines are operating. It's a real intense management. Successful companies have robust processes, clear strategy, and trained people, right?
With this process monitoring and when we're training people so that we can have a closer focus and control, I think that's going to be an important effect in our productivity.
Thank you, André.
Now I'm going to pass the floor onto Bruno Tomazetto at Itaú BBA.
Hi, guys. Good afternoon. Thanks for the questions. André, I wanted to explore a little bit about how the operational margins will be for grains this year, as I think we're going to see this harvest with a lot of volatility in the margins, a peak in the currency, commodity prices going up, with a lot of volatility in costs as well for fertilizers.
I think on this side, we lost a little bit of this track of up until where the farmers can see operational margins a little better or where we could see worse margins than what we've seen last year. I'm trying to focus on the operational margins because I understand that when you look at the last line and you include interest, it's a kind of a sad story to tell, right? But when you see that from the 100 potential levels that you had in the past, now you only have 30, so we're going to focus a little more on the 30 with a leaner structure and a more solid balance sheet to understand the financial health of this guy.
Well, what I would tell you on this question here is that farmers don't have the bank sophistication or big company sophistication to have a risk analysis as we do. But the way they can balance this out is with the exchange operations and transactions. But there's an interesting point, which is, we saw a significant reduction in the margins last year, because most of our costs have a dollarized structure, right? When farmers last year were setting up their production costs, they had a six as currency. Then they came back, and they would sell it with 520. Brazilian farmers are genius. They know how to operate, but don't make them operate derivatives that are not going to work, right? Because you had this crocodile mouth that was inverted, right? But now, what we see is this expectation for the next harvest.
We see the opposite, right? Farmers formed their production costs and plantations here while the dollar kind of skyrocketed at $5.40 now, right? But the dollar was like $5.90, $5.80. The next harvest, my expectation is that you will have a cost that is a lot cheaper, and in normal pressure and temperature costs, I think there is going to be a cheaper cost with a revenue that has a more expensive dollar, right? So if they do not do anything, there is still a win, right? When you look at this last year, we had a dollar at $6, and now $5.10, $5.20, so it depends on the month you cut off at, right? But I do believe there is margin recovery, right? That is, of course, when we look at the gross margin, right, and how that is funded. But when we see the gross margin, we see the recovery.
I will give an example of our business, right? Last year, we operated with a cost of about BRL 390. Now we are going to operate with about BRL 4,000, right? We are kind of at the same cost, but last year, we had an expectation for price of about BRL 116. That is the average in the company, right? You have soy in Mato Grosso, Maranhão, about BRL 116 or so. This year, we are already seeing an actual of BRL 124, BRL 125, and it could go up a bit more. So I see a margin recovery, but in my understanding, this is not sufficient, right, to be able to balance out the It is very simple, right? When we look at this, and you can see there is not a significant change in the cost matrix, right? You had a change of 4% or 5% in the revenue curve, but maybe 4 or 5 basis points.
One thing kind of balances out the other, right? But if you look at this before, then we see a margin recovery. Who is the buyer of the BrasilAgro farm? Well, that is why I am an optimist, right? The guy that is kind of stuck on you as the bank. I want the guy that has the liquidity, the guy that is asking you for your blessing. I want distance from this guy, right? I want to sell to the guy that you are fighting over how to get their CDI, right? That happens all the time, right? When you have these asymmetric scenarios in the market, richer guys concentrate more and more riches. The smaller farmers are still going to have the interest subsidized. The medium-sized ones are the ones that most suffer, right? You have the big guys that are decapitalized, right?
I see this recovery in the margins. We start seeing the recovery of other crops as well. We have You can see this basket that is a lot better. We can see this recovery for those that do not have this leverage, right? It is not sufficient margin, right, to cover the spread, right?
Okay, thank you, André.
Well, I want to thank you all once again for watching us during our earnings call. For those of you that have been watching us from home, the live transmission is going to wrap up now, and we will continue, because everything will also be recorded and provided on YouTube if you are not in person with us. But thank you so much, André and Gustavo, and we will see you next quarter. Bye, guys. Thanks.