Rising wealth, changing diets, and increased food consumption across the developing world—along with a growing global population—are fueling a steady rise in demand for agricultural commodities such as sugar, soybeans, and meat. Consequently, the prospects for growers, ranchers, processors, and other agribusinesses are blossoming—and perhaps nowhere more so than in Brazil and to a certain extent in Argentina, already agricultural giants that accounted for $73 billion in exports last year.

The opportunities are considerable. Historically fragmented businesses such as livestock and sugar, for instance, are beginning to consolidate, offering companies the benefits of increased scale (see sidebar, “Fragmented markets”). New sources of financing allow players to overcome historically underdeveloped capital markets. Increased demand for affordable and clean energy is creating nontraditional opportunities, such as the production and export of biofuels. (Brazil is already the world’s largest producer of ethanol; its exports rose by more than 65 percent in 2006.)

Yet some domestic companies (including local ones and local units of multinationals) aren’t benefiting fully, because they aren’t as efficient as they could be or aren’t getting as much as they...