The drought worsens and has a full impact on wheat production: almost 500 million dollars have already been lost
The lack of rain in the main productive region of the country is affecting the development of wheat cultivation, so it is estimated that production will be lower than initially expected. And there is uncertainty for the corn season that begins in early September.
The first wheat estimate made at the beginning of May by the Buenos Aires Cereal Exchange was encouraging and not even the increase in withholdings to 12% by the Alberto Fernández government stopped the boom that has been taking place in the last 4 years.
The factors that augured a greater sowing were the good humidity in the soil and the favorable prices, which predicted that the area would grow to 6.8 million hectares, 3% more than the previous cycle and in view of this greater surface and Using technology, production would reach the record of 21 million tons, 12% more than the previous season.
The Rosario Stock Exchange was more auspicious and estimated an area of 7 million hectares and a production of 22 million tons.
The truth is that the lack of water has worsened in the main productive regions since the introduction of the cereal began and both entities have already cut their projections for both planting and production.
“From the beginning the wheat campaign was complicated”, summarized Esteban Copati, Head of Agricultural Estimates of the Buenos Aires entity.
Along these lines, he remarked that production will be below 20 million tons because the intention of sowing could not be specified and finally, the area dropped to 6.5 million hectares (100,000 hectares less than the last cycle) and also There will be a decrease in the yield of the cereal due to the lack of water, mainly in the center of the country (main producing area) that is close to entering a reproductive state (when the crop yield is defined).
“One out of every 4 lots has a state from bad to fair and 6 out of 10 lots have a significant water deficit,” he exemplified what happens at the country level.
In any case, he stressed that there is still time to register significant volumes, even above the average of the last 20 years.
For the Rosario Stock Exchange, the drought that wheat is going through is the largest in 10 years and consequently reduced the wheat area to 6.5 million hectares and the harvest to 19 million tons.
Although at this time of year the water supply is normally diminished and it is not logical to expect abundant rainfall, the weak winter rains are important, especially after an autumn that negatively conditioned the start of the fine harvest.
“We are going through a drier winter than usual and it will surely remain that way until the beginning of September,” said Atmospheric Sciences specialist José Luis Aiello in the Rosario Stock Exchange report.
In this sense, he remarked that the short-term forecasts show some improvements in the water supply during the second half of this month, but always with greater probability over the eastern part of the country.
Thus, with 2 million tons less of the cereal to be harvested in December, some 475 million dollars have already been lost of the 5,000 million dollars that would have been generated with a production of 21 million tons.
Uncertainty in sowing corn
The corn planting is in discount time (there are only fifteen days left to start the work) and in the areas affected by the lack of water, to sow from 30 millimeters to more than 100 millimeters, specified the Rosario Stock Exchange .
“There is a lack of water in the first 50 cm of the soil, but the reserves are insufficient in the depth profile. And the napas are also lower than last year. Of course, some areas of the east must be excepted, especially Buenos Aires, ”added the institution.
After the sowing record that marked the 2019/20 campaign, the area is estimated at 6.75 million hectares, a year-on-year drop of 7% according to the entity’s estimates.
“What happens with the rains of the change of season will be essential to maintain this level of planting,” he added.
The corn harvest of the 2019/20 cycle has just concluded with 50 million tons and for the first time in 20 years it surpassed soybeans. Cereal exports mark a record, with 37.5 million tons generating foreign exchange for 5,591 million dollars.
In these conditions, he added to the Rosario Stock Exchange, there may be changes modifying the sowing times, going to late plantings (in December) or decisions to switch to soybeans or even sorghum, as is already beginning to be seen in areas with lower yield potential.