Operation: As part of our fiscal year end closing procedures, we are currently performing the physical account of our herd.

The process is more complex and lengthened because of the sanitary restrictions. Under normal conditions, the process is already heavy in terms on logistic (above 5,300 heads at the farm to pool and count) but with the worsening sanitary conditions in the northern province of Argentina and protocols to be applied, its becoming epic.

The cherry on the cake, we have also to face frosts as you can see (the climate of the region is classified as subtropical climate).

Even is this challenging environment, the quality reached of our breed (good hold, colour and uniformity of the calves) makes us proud and motivates the entire team of Curupi Pora.

We have also terminated to refresh our corral facilities. The upgraded chute will allow us to have a better service for delivery or sanitary duties.

Market news: Argentina has now returned to the global beef export trade after its earlier self-imposed 30-day suspension – but only under significant limitations, some of which are likely to last until the end of the year. Argentinean beef exporters are now permitted to export 50 % of volume recorded in 2020, measured on a monthly basis, but a complete suspension will remain on certain items. This means that around 250,000 tonnes of beef would be removed from the global beef market. The biggest loser out of this will be China as Chinese were getting around 40,000 tonnes a month in shipments, this year that will be reduced to about 20,000 tonnes.

Situation/weather: After having registered some good rainfalls in March (247 mm) which have redensified the pastures and recharged our natural lagoon as well as the rainwater tanks, we have again entered in a dry period since April (rainfall: -42% in April and -75% in May compared with the historical average for the same period). According to the latest weather forecasts, a mild dry winter is anticipated…and we are just coming out from a drought season.

Cattle operation: We have currently above 5,300 heads at the farm, all in very good shape knowing that we are coming from an intense drought period.

Insemination process of the 2,258 cows in service (natural & artificial) took place mid-May, and the fertility tests will be performed by the end of June 2021. You can see below some 2 years old heifers performing their 1^st service in 2021.

We are also in the process of upgrading and refreshing the corral facilities to have a better service for delivery or sanitary duties. You can see the refreshing work performed for the entry of the cattle into the chute.

Sales: We are in the process of selling 375 calves of around 150 kg at the same market conditions then before the introduction of export restrictions. We could get this great opportunity thanks to the quality of our breed (good hold, colour and uniformity of the calves).

On May 18, cattle farmers started a 9 day halt on cow sales to slaughterhouses to protest against the governmental decision to suspend beef exports for at least 30 days in order to moderate skyrocketing domestic meat prices.

To justify this decision, President Fernández said in an interview that “The meat issue got out of hand. The prices rise month by month without justification. We have to put it in order”. The price rises contributed to Argentine inflation, already among the highest in the world, reaching 17.6% in the 1^st quarter of 2021. The cost of living soared 46.3% in the last 12 months, and beef prices roses 65.3% over the same period.

For the Argentine Rural Society President, “The damage caused by the measure will decrease the supply of meat, making prices rise as has happened in the past.” The beef industry employs around 100,000 people and Argentina exported 819 billion tons of beef and cow leather worth $3.4 billion in 2020-primarily to China and Russia. Neighbouring countries Such as Uruguay, Brazil and Paraguay will take advantage of this situation and benefit from new market opportunities for their beef.

Back in 2006 when Néstor Kirchner had risen to 40 % export taxes on beef, the dollars from the commodity price boom perhaps gave Argentina the luxury of being able to sacrifice one of its main export markets but that luxury does not exist today …even with a new commodity boom placing grain prices at near-record levels. During that period, 12.5 million head of cattle and 19,000 jobs were lost that have not yet been recovered.

With respect to our operations (over 8,600 heads in Argentina), we have decided to defer our forecasted cattle sales (mostly male calves coming from Curupi Pora farm) while waiting to have more readability. We have dense pasture at the farm currently and sale them with a higher weight.

Land clearing: We have initiated a clearing operation on 500 ha in order to control the natural vegetation which is typical for the region of Salta (a formerly forest area with a subtropical highland climate). This operation will help us in the re-growth of pastures in those plots and will also facilitate the management of the cattle.

To this aim, we are only using specifically machinery and no phytosanitary products as their prices have significantly increased in the latest months. Furthermore, the results are longer to wait and in any cases, clearing machines must be used.

You can see the chopper blades in action. This machine was specifically designed to help control invasive brush, shrubs and weeds, while making cleaning or dismantling pastures much easier and faster than ever. His action is also helping to penetrate the soil enough to fracture the deeper, “dry pan” soil. This helps to prevent water run off and maintain high levels of water retention, while not hurting the existing grass or exposing the roots.

Once the dry pan soil is fractured, it enables water, air, and organic matter to penetrate deeper into the soil. This process allows grass or hay to establish deeper root beds, giving you a much more stable and hearty foliage. We hope to achieve our target of 500 ha before the rainy season will started in November, and increase our chances of pasture re-growth.

Cattle operation: We have currently around 3,000 heads at the farm. After the intense drought we faced since March 2020, the cattle need time to return to normal condition. In the meantime we continue to supplement with pellets and corn for the most sensitive categories.

Cattle service is underway and inseminations should be completed by mid-May (1,240 cows). Fertility tests should then be available by mid-end of June. For this service, we don t have big expectations given the drought experienced earlier. We will evaluate the opportunity to give the cows a 2^nd chance or to sale the weakest as beef to slaughterhouses in order to stabilize the herd and reduce death ratio as well as supplementation costs.

After the forest fire registered on 25/08/20, we have started to evacuate the slash on cutting, twigs and dead wood. It’s key to perform this operation after a fire otherwise you significantly increase the fire danger for the following year’s by leaving the dismantled crowns on the ground forming a thin layer of fine dry fuel.

Furthermore, trees weakened by fire may also be subject to bark beetle attacks causing additional mortality. These attacks can even be extended to neighboring trees that were not affected by the fire and cause further mortalities.

We estimate that over 50% of our tree plantations, compound of eucalyptus and pines trees, were affected in various stages. Trees planted after 2008 have been totally affected and the oldest one have only be partially affected.

Pine trees plantations, which account for 77% of the affected area, were the most resilient to flame as their thick bark does not catch fire or burn easily. It also protects the inside of the trunk, the living tissues that transport water and nutrients, from heat damage. Pine trees drop lower branches as they age, preventing fire from spreading to tree tops. Fire can destroy the cambium (tissue between wood and bark that actually grows to form wood in trees) on part of the trunk surface without necessarily killing the tree. The consequences for the tree are then proportional to the height of the charred trunk.

The good news is that our forest advisor has identified some signs of natural regrowth: Eucalyptus and pine trees have both a strong regeneration capacity. You can see some cuts of pine trees partially affected which have been sold to a wood products manufacturer.