Situation/weather: While drought has ravaged the wheat and barley crop on the Pampas growing belt, we have an optimal situation and weather. Thanks to a wet previous cycle and the current usual hot temperature for this period of the year, pastures have been boosted and are now highly abundant and dense in all section of the farm.

Even Santa Lucia River with his current optimal level allows a direct drinking access to the cattle and expands the grazing area bordering the limit of our farm with the river. The farm is in excellent shape thanks to the permanent hard work of the gauchos and their manager, Ricardo Borda.

Silage and pasture program: We have sowed around 150 ha of corn, which will be use later to feed the herd. Herbicide has just been applied and we are expecting yields around 4.5t/ha.

As part of our program, we are in process of sowing subtropical pastures (Bracchiria) which showed good resilience to heat waves and water shortfalls.

Cattle operation (4,700 heads): The cattle is in excellent shape as you can see for the various categories. We have started the insemination process of the heifers.

Heifers

We are also anticipating some market conditions changed by selling some male calves (180 kg) as well as some fattening cows (460 kg). Across all categories, we are planning to sell around 1,500 heads.

Australian water tank (400,000 liters of capacity)

Situation/weather: After having faced a wet summer as Northeast Argentina has been hit by extensive flooding (please refer to post of January 2019), water is evacuating more slowly than it used to, reducing the available grassing area for the cattle.

Our situation is not unique as our neighbours are facing the same situation. After having performed some investigations, it appears that not only the river has been affected by the flood faced earlier this year, but some illegal internal protection wall built by some farmers upper the river has changed the water course. Local authorities are investigating to identify the origin of the problems and to take measures against. Meanwhile, we are also talking with our neighbours to the local authorities so that they start to perform readjustments in the river and authorize us also to build some internal protections to prevent.

Cattle operation (2,613 heads): Overall the cattle is in decent condition given the situation faced earlier this year (heifers and female calves suffered the most). We are working on the improvement of the heifers since beginning of December; we will start with the insemination process of the heifers. We have currently 363 heifers (2 years old) at the farm. Our objective is to achieve a pregnancy ratio above 80% with 80% of weaned calves. Last year, we registered 76% of pregnancy ratio.

20 young bulls (2 years old) have just been transferred from Curupi Pora farm for genetic purpose. Bull selection can be the most powerful method of genetic improvement in the herd. However, young bulls have not the same fertility power as they are still growing and so far, they have only been fattened (overly fat). Bulls should be gradually stepped down in condition to avoid nutritional disorders and adverse effects on semen production.

Alberto Fernandez had 48.1% of the vote, ahead of Macri’s 40.4%, with more than 97% of ballots counted, putting the center-left challenger over the 45% threshold to avoid a runoff and win the election outright.

Fernández’s win signals the return to national power of Peronism, tilting the nation back toward left-wing populism at a time of economic crisis.  But while voters rejected the austerity of Macri’s government, the outcome was also tighter than expected, reflecting wariness about Fernández’s ability to steer the economy through tricky waters.

President-elect Fernández, who assumes office on 10 December, will run into immediate difficulty given the lack of funds to play with: The economy is contracting, inflation is above 50%, and unemployment is more than 10% and 35% of the population lives below the poverty line. Investors also expect the government to default at some point. Macri’s administration racked up debt to cover the bloated deficit he inherited from former president Cristina Kirchner.

He must also satisfy the competing demands of far-left factions in his broad coalition that want more social spending, and the International Monetary Fund, which agreed to a record USD 56 billion bailout last year. The IMF will likely have little appetite to dole out more cash if Fernández implements policies that risk a balanced budget.

His victory, and the uncertainty around it, comes at a fragile moment for Latin America. A wave of violent, anti-austerity protests has rocked Chile and Ecuador; Peru faces major political uncertainty; Venezuela’s economy has collapsed; and the presidential election result in Bolivia has been called into question.

Shortly after the result was announced Sunday, Argentina’s central bank (BCRA) announced it is tightening currency controls. US Dollar purchases will be restricted to USD 200 per month, down from USD 10 000 per month. These measures, which were implemented to preserve the reserves of the central bank, will remain in place until December.

On September 1^st, Argentina’s government has imposed capital controls to stop a slump in foreign currency reserves and the peso that has pushed the country to the brink of default.

The announcement comes as Argentina’s currency crisis spirals out of control. About $3 billion drained out of foreign currency reserves between 29 and 30 august alone as the government struggled to repay short-term debt and slow the drop in the peso. 

The financial crisis has also been exacerbated by Macri’s defeat in a recent primary poll. The peso collapsed more than 25% last month after primary election results showed the market-friendly government of Macri has little chance of retaining power in October’s polls. President Macri has given up trying to restore investors’ confidence and has instead resorted to the policies he had criticized his predecessors for imposing.

Briefly, the central bank will now requires exporters to repatriate within 5 days earnings from sales abroad, while all companies, not just banks, must seek authorisation to sell pesos for foreign currency. Individual Argentines will be limited to dollar purchases of no more than $10,000 a month. These measures, which will be effective until December 31, 2019, were designed by the Argentine Government as a temporary emergency solution to prevent the dollarization of certain cash flows.

For now, these measures are not affecting directly our business in Argentina as we are not an export company and sale locally in peso our beef production. However, we believe this is an initial step of a return to heavy state intervention.