Author: Jonathan Gilbert, Bloomberg
Publish date: 2023-05-23 08:07:35
Farmers in Argentina need rainfall within the next three weeks to have any chance of emerging from a disastrous drought that has withered crops and reduced agricultural exports.
Farmers in the heart of the Pampas region, the so-called ‘zona núcleo’, need rain in the next few days to wetten fields so they can plant wheat, according to Cecilia Conde, chief crop analyst at the Buenos Aires Grain Exchange. Otherwise, the exchange will be forced to trim its projections.
Agriculture is key to Argentina’s economy, as the cash-strapped Central Bank needs dollars from crop exports to stem the peso’s slide. Farmers are struggling to recover from three consecutive years of drought. Soybean fields now being harvested will have the lowest production in two decades of grain exchange records, while last season’s dismal wheat crop reduced Argentina’s exports by two-thirds.
Argentina, one of the world’s leading food producers, has two growing seasons in the year: wheat and barley, then soybean and maize.
Last weekend’s rains were good news for wheat growers, “but more is needed,” Conde said.
The repercussions of another failed crop would be felt by the world’s feedlot units and farm traders from Chicago to Singapore. World grain markets have been hit in the past year by droughts, which have slowed production and caused transportation bottlenecks on rivers in the United States and South America, as well as the war between Russia and Ukraine.
Consistent rainfall is unlikely until El Niño becomes better established in a few months. But some showers are forecast in the coming days and weeks, according to local agro-climatologists Eduardo Sierra and Leonardo de Benedictis.
In an interview, Sierra said only a couple of showers are needed to be able to plant wheat, and they will apparently arrive in June.
Meteorologists have said for months that the rains will arrive when the La Niña weather pattern gives way to El Niño, which brings wetter weather in Argentina. But rains in the core zone failed to arrive in the first quarter and have been rather elusive in the second quarter.
by Jonathan Gilbert, Bloomberg