South American Real Estate News

43% of Argentine Agricultural Producers believe that the economy will be much better in 2020

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Agricultural producers have expectations about the future of the country somewhat similar to those of last year, according to the entity CREA. ( farmers techinical support organisation )

The survey, conducted in March of 1,233 CREA agriculture entrepreneurs, highlighted that 43% considered that the country’s situation would be better in one year, while in 2018, 46% thought that.

In the past year and a half, they reported, “there was a progressive decrease in expectations”, although at levels much higher than those recorded between 2012 and 2015 when the K Peronist Government controlled the administration.

In most of the agricultural parts of the country, according to CREA, “the yields obtained from sunflower and sorghum were similar or superior to those expected”. In the case of soybeans and corn, production was much higher than budgeted.

However, only 11% of respondents in March said that they had sold their crops (using forward, futures and/or options contracts) a percentage lower than 21% last year.

The low level of forward selling coverage could jeopardize the profit margins of those farmers that must sell all or part of their production of premium soya to pay off debts, pay current expenses or finance the next season, among other uses.

The corn price forward coverage levels are similar to those registered a year ago: 13% in 2019 and 14% in 2018. While in the case of the sunflower, only 9% said they had hedged, when one year ago the 19 % of respondents had answered yes.

“A worrying fact, taking into account the reduction in the price recorded by this oilseed from the harvest period to the present,” they added.

According to CREA, the financing needs could return to recent historical values, due to the good yields achieved and observing what still needs to be harvested. “After the drought experienced in 2018 there is reduced liquidity in the agro sector” they said.

The businessmen also made their investment perspectives known. 68% of respondents said they made or plan to make new purchases during 2019. 30% said they plan to change their 4 x 4 pickups, a similar figure to the one registered a year ago.

Whilst 22% said they will change the plastic silo bags used for temporary grain storage, slightly less than the 25% that had said yes in 2018. Another 14% will replace tractors, 11% seeders, 6% sprayers and another 3% combine harvesters.

All in all it is looking for better future for the agro sector and those that are dependant on it.

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