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PARAGUAY – Rice harvest has begun at Salitre Cue farm (February 2022).

Posted on by Campos Orientales

Weather: The Situation remains unchanged as our region is still facing “extreme drought” conditions. No rain occurred since a while and we are registering high-temperature peaks.

Rice: On 25/01/22, we began to harvest our 1st block. So far, we have harvested 26 ha and got a preliminary yield of 5.7 t/ha with an index quality of 58 entire grain. Given our past year experience with similar conditions, we got a better yield and a much better quality in those plots than last harvest.

Water stress recorded over the past months affected the grain development in its blooming stage (unfilled grains) in some plots. We tried to manage water needs the best way we could and provide as much as possible water to each plots according to its irrigation stage with our artificial lake as the river was dry but our reserve could not always cover all optimal needs for the entire sowed area.

You can see below the difference of an optimal field we have and another affected by water stress. Meanwhile, we continue with the harvest of our other blocks as humidity of grains is going down very quickly given the heat weave faced, and we are expecting various yield deviation from the plan so as quality depending the plots/blocks.

Soybean: 250 ha of soy have been damaged by the extremely hot and dry weather. As you can see lots of flowers and grains in this area could not finish their normal development. Lost in yields have to be anticipated and we estimated an average yield of 1t/ha for this area versus 2.5t/ha projected.

Our situation is not unique as Paraguay’s Agriculture Ministry has just announced a 40% drop in soybean harvest this season for the country due to the unprecedented weather conditions. In some Paraguayan towns, some producers have already reported losses of 70% to 100% in some batches.

In addition to the agricultural performance, other considerations need to address the logistics situation. Most exports are shipped through the Paraná River, which suffered for the past 2 years from the worst downspout in the last 77 years.

The Paraná river is part of a significant trade circuit for several South American countries— namely Argentina, Paraguay, Brazil, Uruguay, and Bolivia. Many grain-bearing trade ships have had no other choice than to lower their carrying capacities to prevent interference from the increasingly shallow riverbed. This has raised significantly transportation prices and delivery delays.

ARGENTINA – Government reaches agreement with IMF to refinance USD 44.5-billion debt (January 2022).

Posted on by Campos Orientales

After months of negotiations, President Alberto Fernández announced 28/01/22 that Argentina has reached a credit agreement with the International Monetary Fund that will allow the country access to new financing and buy it time to help it repay its USD 44.5-billion debt.

Without this new agreement, Argentina would have been faced with repayments, between principal and interest, of more than USD 9 billion in 2022, as much in 2023, and about USD 4 billion in 2024. Totally unsustainable, and the country would have been declared in insolvency on 01/02/22.

Argentina has pledged to slowly reduce its fiscal deficit and cut the Central Bank’s financing of the Treasury as part of an economic programme agreed with the IMF.  The deal would also give Argentina at least a four-and-a-half year grace period before starting to pay back its debt.

According to Argentine representatives, the key points of the agreement are as follow:

1/ Argentina will aim for a primary fiscal deficit of 2.5% in 2022, 1.9% in 2023 and 0.9% in 2024,

2/ Plans to reduce Central Bank assistance to the Treasury to 1% of GDP in 2022, 0.6% in 2023, and “near zero” in 2024,

3/ Argentina will continue with FX policy currently in place, without large devaluation jumps,

4/ The plan targets USD 5 billion in additional foreign reserves in 2022,

5/ Government won’t seek labour reform or privatise public companies,

6/ Argentina will continue with price controls as part of its inflation strategy,

7/ Plan also targets positive real interest rates.

The agreement needs know to be approved by the Congress as well as by the board of Directors of the IMF. In summary, Argentina has done with the IMF the same thing it did in 2020 with private creditors: push the ball a little further ahead. To be followed…

ARGENTINA – Update on Curupi Pora farm activities (January 2022)

Posted on by Campos Orientales

Situation/weather: Goodbye rain, hello heat wave! Temperatures reached stifling highs, exceeding 40°c in many provinces. Lot of cities are suffering from power cuts, creating chaotic situations (traffic, etc – see article from the Buenos Aires Times, dated 11/01/22). Hot, dry weather and low humidity levels are also creating dangerous fire conditions. Firefighters are already mobilized in 8 provinces to fight large fires.

We are not exempted in Corrientes region as the situation has been classified under extreme vigilance by the authorities for forest or brush fires (Article from Télam, dated 10/01/22).

Cattle operation: We have currently above 6,500 heads at the farm. Heat stress can strongly impact the animals at various levels (well-being, production, diet, fertility, etc.). To management this stress, we are adjusting food supply (silage, completed with corn and pellets).

Grassing area has reducing given the lack of water and the steria, sowed earlier this year, is hardly emerging. Thanks to a daily close control, the cattle is overall in good shape so far as you can see but beef production will be affected.

This year, we have subleased to a contractor 215 ha where corn and soybean have been sowed. We will be paid in kind as we need corn and soy to feed our heard. Both crop developments are heavily affected by water stress and the hot temperatures as you can see.

The drought, which is currently devastating crops across South America, has prompted swift cuts to forecasts for the soybean harvest in Argentina (the world’s biggest exporter of soybean oil and meal). The Rosario Stock Exchange has cut so far its estimate for the crop by 11%. The drought and hydrothermal stress have been so severe in the last 30 days that they rule out the possibility of a normal season. The last drought of the magnitude of this season’s, in 2018, cut at least 1% point from Argentina gross domestic product.

PARAGUAY – Update on Salitre Cue farm activities (January 2022).

Posted on by Campos Orientales

Weather/Situation: Our region is in “extreme drought” situation so as in southern Brazil or southern Mato Grosso do Sul and northern Argentina. Most part of the La Plata Basin suffers from heat waves and absolutely no rain as you can see on the satellite imagery.

The hydric deficit and above-average temperatures have already significantly damaged the 2021/22 soybean crop in the above mentioned area in Brazil.

Our river (a tributary to the Paraná River) where we use to pump water for our rice operation is almost dry.

Rice: The 560 ha sowed with rice are still under irrigation and we are forced to use our water reserve from our artificial lake to get those fields irrigated. As we sowed the fields in stages, the first 160 ha are going to be harvested by the end of this month. For now, we are able to maintain continuous flooding in the plots with the reserve water contained in our artificial lake but the high temperatures cause water to evaporate at a much faster rate.

Soybean: Among the 1,100 ha sowed, 150 ha of soy have been damaged by the extremely hot and dry weather. This stress scenario occurred in the middle of the flowering period; lots of flowers and grains in this area could not finish their normal development. Lost in yields have to be anticipated and we estimated an average yield of 1t/ha for this area versus 2.5t/ha projected.

 

PARAGUAY – Update on Salitre Cue farm activities (December 2021).

Posted on by Campos Orientales

Weather/Situation: La Niña conditions are back and may lasting until spring 2022. No rain has been recorded yet this month and is planned for now. You can see on the below map dated 05/12/21, the drought situation faced. Our region is classified in “extreme drought” situation so as most part of the La Plata Basin.

The river Tebicuary, a tributary to the Paraná River, is at a low level as you can see on the picture, and it’s currently impossible to pump water directly from there.

Rice: The 560 ha sowed with rice are currently under irrigation and we are forced to use our water reserve from our artificial lake to get those fields irrigated. Normally, we should have enough water in our artifial lake to irrigate 60 days more all the plots. It’s key to have continuous flooding of water as it provides the best growth environment for rice.

Soybean: 1,100 ha have been sowed as planned successfully. The crop is developing very well so far as you can see. Soybean diversification helps us to mitigate our previous exposition to the sole cultivation of rice. Outlooks for this crop are very positive as in opposite to rice whose ultimate sole market is human consumption.

Corn: We were trying to close some third party leasing contract to develop this crop. Unfortunately, we could not close any lease agreement as the operator interested in our surface could not provided sufficient guarantee to operate properly the lease surface neither to have sufficient inputs available to show the wishes surface. As this option was explored for 1-year, we decided not to move forward. And preserve the quality of our land.

ARGENTINA – Update on Curupi Pora farm activities (December 2021)

Posted on by Campos Orientales

Situation/weather: We continue to enjoy some little rains which help for the regrowth of our permanent pastures as well as for the development of the 120 ha recently sowed with setaria.  This setaria will be a permanent pasture for grazing and for cut fodder.

For now, the farm is in great shape. However, La Niña is set to wreak havoc during Argentina’s upcoming summer, according to the latest report of the Buenos Aires Grain Exchange; only little rain will fall in January and February across most of the country.

Cattle operation: Our cattle herd (over 6,500 heads currently) is performing very well. We are currently working on the spring service, where between 2,800 and 3,000 cows and heifers are in service. In terms of beef production, 195 tons were produced by end of October (31% of the annual objectives).

For now, no cattle sales are planned. It’s important to mention that the Argentine government has extended beef export restrictions until the end of December. Restrictions will remain in place for 7 cuts of beef to ensure domestic supply.

However, Argentina has lifted bans on exporting beef to China and under the new guidelines, cows which “no longer have reproductive capacity and that are mostly not consumed in the domestic market” can be sold to China. As a result, Argentine beef prices rose by 25% in November. It’s worth to mention that Argentina so as Paraguay or Uruguay are taking benefit here from the Chinese ban on Brazil’s beef. Beef exports from Brazil to China were suspended after 2 cases of “mad cow” were reported, one in Minas Gerais and the other in Matto Grosso.

Argentina’s government is preparing a farm sector roadmap for the next 2 years and hopes to ease conflicts with the sector over caps on meat exports and grains. President Fernández’s government sorely needs farm export dollars to replenish depleted currency reserves and to pay off debt amid talks to delay $45 billion it owes the IMF. Nevertheless, market interventions are not likely to generate confidence and investment in a country that desperately need it.

PARAGUAY – Update on Salitre Cue farm activities (November 2021).

Posted on by Campos Orientales

Weather/Situation: Although the weather forecast remains very worrying for the season (see weather map below), we are for the moment very lucky because we have recently recorded good abundant rains as you can see.

Those rains help us a lot as the level of the river recovered and we can again pump water directly from there to irrigate rice without using our water reserve in our artificial lake (back up in case of water stress period). We hope that these conditions will be maintained during the coming months (blooming stage when grains are filled).

Soybean: Over 800 ha have been sowed so far and are nicely developing as you can see. We are maintaining our forecast to sow 1,100 ha.

Rice: We have completed the sowing of 560 ha.  The 1st plots sowed are developing well so far. We are at 1st stage and will start beginning of December with 2nd stage when the plants are large enough to withstand shallow flooding. The full irrigation cycle of the crops takes 90 days and it’s important to mention that continuous flooding of water provides the best growth environment for rice.

We are not going to sow rice in block G (450 ha) given weather uncertainties and the extreme low level in the Paraguay River has heavily delayed the supply in all inputs. As a consequence, it is s to risky to start sowing rice in this block. We will stay with 560 ha of rice for this season.

Corn: As previously mentioned and rather than increasing the potential soybean area by reallocating rice surface to soybean, we have enter in negotiation with a third party for the lease of our available surface (up to 1,000 ha) to cultivate corn. This will be a 1-year scenario; weather situation implies us to be pragmatic. The outlook for corn is attractive and it will allow us to diversify our risk/mix.

ARGENTINA – Update on Curupi Pora farm activities (November 2021).

Posted on by Campos Orientales

Situation/weather: The farm is currently in very good shape as we have registered several good rains at the farm which allows the densification of the pastures.

You can see the dense pastures at our lagoon were the cattle have access to refresh. This is very good for our cattle activities. However, weather forecasts announce a drought period for January to March 2022 (La Nina) and to this aim, we bought already pellets for supplementation on the market as grassing area will have reduced after this period.

Cattle operation: Our cattle herd (over 5,200 heads currently) is performing very well and has a great uniformity as you can see. Below, you can see claves.

Here, you have some bulls which have been sold recently and which are going to be delivery to our client.

We have started spring service where between 2,800 and 3,000 cows and heifers are in service. Insemination of the animals already took place. In our farm in Salta (San Bartolo), the service started later given the climate and farm specificities (January). There, around 1,300 mothers will be in service.

Argentina – Government loses majority in Congress after midterm elections (November 2021).

Posted on by Campos Orientales

Already in the minority in the lower house Chamber of Deputies, Fernández’s Frente de Todos coalition looks set to drop from 41 to 35 seats in the 72-member Senate, based on projections with more than 98% of votes counted in the midterm elections held on 14/11/21.

According to a breakdown published by La Nación newspaper, the opposition Juntos por el Cambio coalition took 41.97% of the national vote (all votes cast), with the ruling Peronist coalition on 33.57%. The opposition, which will now gain ground in both chambers of Congress, scored key victories in Buenos Aires City and the provinces of Buenos Aires, Córdoba, Mendoza and Santa Fe, regions that carry a lot of electoral weight. Juntos por el Cambio also emerged victorious in the provinces of Jujuy, La Pampa, Chubut, Corrientes, Entre Ríos, Misiones, San Luis and Santa Cruz.

Mr Fernández will now likely be forced to make concessions to the opposition during the last two years of his mandate in order to pass laws or make key appointments. Even if the more investor-friendly opposition gained power, the country will face economic turbulences in the coming months. Among others, Argentina is in a tricky renegotiation with the I.M.F. over the repayment of a US 44 billion debt. If no new repayment schedule is found, Argentina will have to repay US19 billion in 2022 and as much again in 2023. Let’s see some light despite all the darkness… Mrs Kirchner will no longer have a bloc in the Senate that guarantees she can pull the strings at her own pace.