Situation/weather: We are back to a more normal situation in terms of weather. Last week of March, we registered some rains which allow us to begin again pumping water from the river (restrictions set up by authorities have been lifted) in order to fulfill our artificial lake used as water reserve.

Due to the intense drought period we faced earlier this cycle, we were forced to use all our water reserve to irrigate the rice fields. However, it was still not enough as we report it previously.

Drought situations in Latam (26/10/20)

Harvest: Harvest and drying process have been completed. Among the 965 ha which could be sowed (vs 1528 ha budgeted), we could only harvest first stage of sowing on 538 ha. We could temporarily irrigate our first block of sowing thanks to our artificial lake but not the 2^nd stage which we had to abandon (see previous posts).

We have produced 2,763 tons with a yield of 5.1 t/ha and an average quality index of 42%. We have sold almost all rice stored in our silos, and we could sold it at a peak price of USD 250/t. However, we are far from our objectives this year; it was a very challenging and disappointing campaign for us so as all the rice producers.

Diversification: For diversification purpose, we agreed with our partner to add soybean cultivation to our mix. We are planning to develop with our partner 1,100 ha of soybean at the farm over the next 3 years.

The farm will then have a modular double production: 1,600 ha dedicated to rice cultivation and 1,100 ha dedicated to soybean cultivation. Soybean and rice have not the same momentum of production and soybean production does not require irrigation like rice. Furthermore, this crop has great outlook. China imports the most soy and is expected to significantly increase its import of the commodity. Soy is pervasive in our lives. Not only are soybeans made into food products like tofu, soy sauce, and meat substitutes, but we also eat them in the form of soybean oil and soybean meal. Soybean meal is widely used as animal feed, so we humans consume much of it indirectly via our meat and dairy.

You can see on the farm map our productive area of which 2,840 ha are dedicated to crops production (adjustable) and 270 ha may be allocated in a near future to a cattle breeding activity. We are going to start land preparation of soybean and rice in early April.

Situation/weather: The rains, which were so sorely lacking during the sowing and the development period of our rice, are back as you can see. The river went up to a more normal situation and we are taking advantage to refill smoothly our reservoir which reached it lowest level due to the intense drought the entire region faced earlier this cycle.

Production: The harvest of our 1^st block (538 has) is almost completed, and production is know processed to be dried and stored in our silos. As for our 2^nd block (438 has), our engineers consider that the plants have not developed enough to worth any harvest.

We faced water stress conditions for this block during vegetative, flowering and grain filling stages. Water stress at vegetative stage significantly reduced plant height and total biomass due to decrease of photosynthesis rate and dry matter accumulation. However, water stress at flowering stage had a greater grain yield reduction than water stress at other times.

Only weeds have developed well as you can see. The minor small rains we registered during the 2^nd semester 2020 only help to boost them. Weeds have competed with rice for water, nutrients, space and light.

As a result, we have decided not to harvest the entire block and the land will be cleaning for the next cycle.

Market: Global rice output is tentatively expected at a new peak on bigger outturns in Asian producers, including India and China. Consumption is also forecast to trend higher on population growth, albeit with uptake in India potentially declining due to the conclusion of COVID-19-related food security schemes. Following a contraction in the prior season, world stocks could edge up.

For now, local prices remain at peak level as most of the farmers have not started yet their harvest. Given the drought faced by all producers, the production will contract but producers are going to be forced to sell what could be saved to cover their costs under conditions set up by mills due to the High level of indebtedness of producers and accumulation of bad cycles.

Situation/weather: After having faced a long drought period with strong water shortage, rains are back at the worst possible time as we are starting harvest period. Rainfalls are delaying the harvest process as the soil became muddy and the combine needs to adjust their speed rotation to avoid losses in yield. Meanwhile, humidity of grains is going down quickly and we are currently already in a range of 20 to 23% which is an indication of attaining physiological maturity.

Production: on 11/01/21, we began to harvest our 1^st block (Block G – 538 has).  So far, we have harvested 50 has and got a preliminary yield of 6.5 t/ha with an index quality between 50 and 54 entire grain. We are expecting lower yields for the remaining surface as the plots suffered more for water shortage.

Correct timing at harvest is essential to avoid losses incurred by harvesting too soon or too late. Immature grains harvested too early result in a high percentage of broken and low milling recovery, while if harvesting is delayed; the crop is exposed to insects, rodents and birds, in addition to the risks of lodging and shattering.

However, water stress recorded over the past months affected the grain development in its germination period and in its blooming stage (unfilled grains). The situation is irreversible.

As for our 2^nd block of sowing (427 has), the production has suffered the most from the drought and we are going to evaluate the fact if its worth or not to harvest the entire block. The situation is very complex this year and it’s going to be a bad season for all producers.

Weather: The situation remains unchanged as a large part of South America is in the grip of a serious drought. Over the last month, we registered 77 mm of disparate rains whereas it’s generally raining 246 mm on average. Given the ambient temperatures which exceed 40°c during the day, the rains did not even manage to permanently moisten the soil (immediate vaporization).

The forecast for the next 3 months indicates that water deficits will continue to shrink considerably. Severe deficits are forecast in Brazil from Mato Grosso do Sul through São Paulo State, in Paraguay and in the northern region of Argentina.

Sowing and irrigation: Only 1,000 has have been sowed and we are not going to sow any incremental surface given the situation. Among the surface sowed, 500 has of plants are going to be abandoned given the lack of water available. At the stage, rainfalls registered are only boosting weeds for the 2^nd stage sowing.

We have allocated the raining water available from our artificial lake to the 1^st block sowing (Block G) as the crops was in a more advanced stage of development. However, the blooming stage of the crop is also comprised due to water stress.

Our reservoir is fully empty so as the river where authorities prohibited any water pumping. Our operating team is expecting now yields in a range of 1t/has to 3t/has for the 1^st block sowed – meaning 1,500 t of paddy in the best scenario. All rice producers along the river Tebicuary are in the same situation; some are even worse as they sow they entire forecasted surface and will have to abandon it as they did not have water reserve’s like us to mitigate the shortage in water registered over the last months.

We are taking advantage of the very low river level to deepen the entrance to the channel so as more water can in future access the pumps.

Market: Brazilian and Paraguayan mills are still looking actively for product, driving paddy prices to peak level ($280/$290 per ton). However, production will only start to be available by end of January for some producers, except for those who stored their previous harvest. Paddy prices are expected to remain at peak level this year but we cannot predict if we have entered in a new cycle of commodities or if the current situation is related to COvid-19 and a ought climate . Last October, South America experienced its 2^nd most intense drought in almost 2 decades.

Weather: The situation has become complex as the drought is emphasising: For October, we registered only 2 small rains of 20 mm each whereas it’s generally raining 255 mm on average. Temperatures are over 40°C and strong winds increase the number of wildfires in the region. Argentina, Brazil, Bolivia, and Paraguay are mainly affected, especially the region between the Paraguay, Parana, and Uruguay rivers have become critical. The forecast through December indicates that water deficits will shrink considerably. Severe deficits are forecast in Brazil from Mato Grosso do Sul through São Paulo State, in Paraguay and in the northern region of Argentina.

Sowing: We have completed the sowing of our 2^nd block, bringing to 1,000 has the surface cultivated. For now, we have decided not to sow our last block of 550 has budgeted given the water shortage w are facing.

Irrigation: We have been forced already to use our water reserve from our artificial lake to irrigate our 1^st block of 540 has sowed in September and as you can see, the fields are so far in good condition and the paddy is emerging nicely.

However, our artificial lake will soon reach its critical level and we will no more be able to pump any water from there to irrigate the fields. On the video taken at the re-pumping station, you can see the little water still remaining in the lake. Reaming water will be allocated in priority to the 1^st fields sowed.

To save water as much as we can, we only perform some pulse irrigation with one pump in order to keep the soil in the rice fields muddy and not to affect vegetative development of the rice plants. There is nothing else we can do as we need dense rains to recover water in the lake and in the river. If the situation continues, yields and quality of the rice will be affected, especially in the 2^nd block sowed.