South American Real Estate News
/ Argentina Mendoza en / 2016 South American Crop Report

2016 South American Crop Report

image of South American crops

This post is also available in: Spanish

Reports of the grain harvest in South America in 2016 are most satisfactory. Although the realities of the local markets: adverse weather, high input costs and unfavourable exchange rates, do not allow us to say that all crop types have had a good year, on average they did. Below are the details, country by country.

Argentina

The reality in Argentina is indicated by a boom in sales of agrochemicals, fertilizers, new agricultural machinery, combine harvesters and tractors. In terms of sales of machinery, in the first nine months of the year, there has been an increase of an average of 100%, compared to the year 2015. The highest sales have been of new combine harvesters, which have shown an increase of 160%.

It is estimated that the area sown to date of certified soybeans of the best quality would represent a 30% increase over the previous year. In addition, the plantings of maize, wheat and sunflower would show an increase of around 10% compared to the previous season. However, the situation for Argentinean farmers is tight, as costs have risen, and exchange rates, at the moment, do not favor them.

Breaking news reports a drop in rainfall in the southeast of the province of Buenos Aires, which has delayed the sowing of soybeans.

However, at the time of writing, the drought is turning into flood. At this minute it is impossible to evaluate the extent of the damage. It will depend on whether water is promptly evacuated or not.

Soy and maize crops have been sown as normal in Santa Fe, Entre Ríos and Cordoba, though with the floods, those crops are now also at risk.

In the northern and central regions of the country, sowing of the second maize crop is being carried out as usual.

Brazil

The projection of total grain production for the current planting and harvesting season in the first quarter of 2017 has an estimated 14.2% increase over the previous season. This increase in production is mainly due to the recovery of 59.2 million hectares, which, having been previously degraded, but have now been recovered for grain crops.

Increases would be 8.5% for rice, 9.7% for cotton and 7.3% for the production of soy. These crops have already been sown, therefore only inclement weather would alter the expected result.

In relation to the yield per hectare, a projection of a 30.32% increase is maintained. This explains why the previous season yield per hectare was severely affected by El Niño.

In the state of Mato Grosso, if the local climate remains favorable, a record yield of sacks total per hectare of 54.05 is expected, higher than the 53.2 sacks per hectare recorded in the previous season. A 7% increase in the maize crop is also expected.

Climatic conditions for this season, especially in Mato Grosso, opens up the option of a second harvest of corn. In this sector, there has been a decrease in rainfall, although a significant variation in the expected yields is not forecast.

In relation to the production of certified soybeans, in May of this year the first farms were certified. Currently there are 17 certified farms, which will contribute their production this season.

Wheat

Chile

According to data from INE – the National Institute of Statistics – the area planted with maize fell in the 2016 season by an average of 20%. There were also significant declines in the planting of sunflower at -38.8% and beet crops at -21.5%.

The above figures correlate with a very remarkable drop in yields per hectare: for corn, the decline was a -4.95% average and sunflower had a yield downward of -24.9%. Beets had a yield level of 1.4%. This is explained by the fact that towards the time of harvest the very necessary rains allowed this crop to rebound.

In conclusion, the El Niño phenomenon strongly hit these crops and discouraged sowing, and those who felt the effects had lower yields than in previous seasons.

Price and Cost of Production of the South American Crops

The high dependence on imported agricultural inputs, and therefore dependence on the dollar and the exchange rate, is not very optimistic, according to the words of the President of the National Agricultural Society.

Patricio Crespo, in a recent statement to the newspaper La Segunda stated: “Economic activity in 2017 is going to perform better, with growth between 2% and 2.3%. For the agricultural world, the outlook in the medium term is not very auspicious. The availability of water is an issue, and there are low incentives for entrepreneurship.”

With a more critical view, there are incentives for small farmers who wish to undertake export. We believe that Mr. Crespo’s words reflect the reality of the great agricultural entrepreneurs, who collect many of the benefits they enjoyed in the past. The fall in the price of copper puts limits on the fiscal coffers, that have no availability, due to social policies of major urgency.

Paraguay

This country has been the triumphant star in terms of production and export, during this year that concludes. Shipments of soybeans and wheat grew 18% and 102% respectively. This is in relation to the performance of last year’s harvest. The guild report still needs to include some small volumes sent during the month of December, although this does not greatly affect the figures.

The destinations for the growing exports of Paraguayan soybeans are as follows. The European Union stands out with 29%, Russia is ranked second with 18%, Turkey 13%, Brazil 8%, Argentina 7%, Mexico 6%, South Africa 5%, Israel 5%, South Korea 3% and other countries 6%.

It is important to point out that Paraguay has learned lessons from other exporters in the area. Exporting to various markets and changes in the situation of its producers has affected them to a lesser extent.

Golden wheat

Uruguay

A notable success was the winter harvest of barley, which doubled in respect of last year and tripled the yield of the year before. This is explained by favorable climatic conditions, increased exports, and increasing demand on the part of the local brewing industry, which has had a great boom, therefore demanding barley in quantity and quality.

In terms of yields of barley per hectare, these also improved. Yields increased by around 2% on average, exceeding 4 tonnes per hectare.

Regarding soybeans, this month 6,000 tons of soybeans have been exported to Argentina. This news caused a sensation in the two countries, because traditionally Argentina, being a great producer and exporter of soy, has required imports to supply its domestic demand.

We point out that, although the amounts paid per tonne are not reported, it is highly probable that some Argentinean producers who were affected by El Niño have not produced the usual yields for local consumption in fulfillment of the contracted quotas.

Whatever the exact cause, the effect has been a success of this sector in Uruguay.

 

English Editor: Audrey van Ryn

Writer & Translator: Mª Verónica Brain

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.

www.gatewaytosouthamerica.com

From Foraging to Farming in the Andes: New Perspectives on Food Production and Social Organization (Hardcover)


List Price: $129.00 USD
New From: $108.13 USD In Stock
Used from: $103.95 USD In Stock
(Visited 100 times, 1 visits today)
Gateway to South America

About Gateway to South America

Gateway to South America was established in 2006 as a single office in Buenos Aires. The company has since expanded into a vibrant regional network, servicing the Southern Cone communities of Argentina, Brazil, Chile, Paraguay, Peru and Uruguay with professional real estate services. Founded by Geoffrey McRae a New Zealander who maintains an active role in the business it has developed into an International team that has a well-deserved reputation for strong local knowledge, experience and professionalism. I hope you enjoy reading our news site. Please share it on your social media below.

Make a comment on this post

Your email address will not be published. Required fields are marked *