ARGENTINA – Update on San Bartolo farm activities (September 2018).

Situation/weather: The farm is in good shape, recovering from the intense drought all the region faced earlier this year (particularly intensive in Salta region from December to January where generally rainfall occur and boost pastures).

Water availability is key for the breeding and fattening activities we are performing at the farm, not only to cover the daily basic needs of the animals but to ensure dense pasture which enhance ultimately beef production. Over the last 4 years, we have registered a water deficit of around 15% compared to the annual historical average. To this aim, we are analysing the possibility to reactivate and reuse the pressure pipes of an old water tank.

Our second biggest challenge at the farm is the permanent control of the natural vegetation which is typical for the region of Salta (a formerly forest area with a subtropical highland climate). Given the size of the farm, we are working in small-sized lots using a combination of chemicals or machinery/manual clearing to maintain the land.

Cattle operation: We have currently over 2,800 heads of cattle at the farm and working on the increase of the density per hectare of animals. However, lack of rain and high temperature registered (35°C or more) on the previous cycle have affected pastures coverage and livestock watering (on average, we need around 60 litters of water per day and per animal).

Our objectives is to have 2,000 breeding cows by keeping young female calves to increase and replace the herd of mothers, and focus on heifers breeding to achieve a 88% pregnancy ratio with 80% of weaned calves.

For this cycle, we are also planning to sow by ourselves 100 ha of corn and another 100 ha of soybean by a third party and where we are going to collect a lease rent in kind to cover protein needs of the herd. Finally, we have postponed our planned cattle sales waiting for price adjustments.

ARGENTINA – President Macri asks IMF for early release of funds, but still not succeed in dispelling doubts and the FX jumped to a historical peak against the US dollar.

Just 2 months after having closed an agreement with the IMF, President Macri announced on 08/29/18 in a televised address that Argentina has asked for an early release of a $50 billion loan from the IMF ” to guarantee compliance with next year’s financial programme ” as crisis worsens and was trying to negotiate changes in terms as inflation and GDP targets are not going to be met this year. 

Macri said that in the past week there had been “expressions of a lack of trust in the markets” about Argentina and that “This decision aims to eliminate any uncertainty”. The Peso had already lost more than 40% of its value against the US dollar this year and inflation is rampant (over 30% per year).

After his speech, the Peso fell again to close at an all-time low of ARS 34.2 per US dollar. The next day, Argentina lived his “jueves negro” (black Thursday), where the US dollar continued his flight to exceed the historical threshold of 40 pesos (with a peak at 41.7) before the Central Bank raises in emergency its interest rate from 40% to 60% (the highest level in the world) to contain the devaluation.

For the first time in history, the Argentine peso is worth less than the Uruguayan. Everyday life is getting more expensive for Argentines, as the prices of many goods and services still bear a close relation to the US dollar. Furthermore, the combination of spiralling inflation and public spending cuts means wages are not keeping pace with prices, making most people poorer.

 

Other emerging markets such as Turkey and Brazil are also suffering from the devaluation of their currencies this year, but Argentina’s situation is particularly troublesome and will also have ripple effects for the neighbouring countries.

Paraguay – Sowing season will start soon at Salitre Cue farm (August 2018).

While the inauguration ceremony of the new President of Paraguay, Mario Abdo Benitez, took place on 15 August where he announced that his main objective would be to tackle tax evasion and informality, our seeds which we import from Argentina have been delivered to the farm and stored.

Since the beginning, we are intentionally importing our seeds to ensure better traceability and quality. This year production is dedicated 100% to IRGA 424 cultivation over 1,500 ha.

Seed is a living product that must be grown, harvested, and processed correctly in order to realize the yield potential of any rice variety. Good quality seed can increase yields. Using good seed leads to lower seeding rates, higher crop emergence, reduced replanting, more uniform plant stands, and more vigorous early crop growth. Vigorous growth in early stages reduces weed problems and increases crop resistance to insect pests and diseases. All of these factors contribute to higher yields and more productive rice farms.

Good seed is pure (of the chosen variety), full and uniform in size, viable (more than 80% germination with good seedling vigor), and free of weed seeds, seed-borne diseases, pathogens, insects, or other matter.

Choosing seed of a suitable variety of rice that suits the environment it will be grown in and ensuring the seed choosen of that variety is of the highest possible quality is the essential first step in rice production.

Next step will be to full fill our artificial lake of 480 ha with water in case of an extended period of low level of the river. To this aim, we hope that the current low water levels along the Parana river and its tributaries like the river Tebicuary upon which we rely will reverse.

Low water level in the Parana River is causing exporters in Argentina to dispatch vessels without a complete load of grain or other products and increasing freight costs. The summer-long drought in Argentina and a lack of rainfall in southern Brazil is resulting in the lowest water level on the Parana River since 2008.

It takes approximately 30 days for rainfall in southern Brazil to make its way to the Roasrio area. Additionally, the water level in the lower Parana River is also partly determined by the dams and reservoirs on the upper reaches Parana River located primarily in Brazil.

PARAGUAY – Paraguay has emerged as a rice exporter, shifting trade flows in South America (August 2018).

While soybean grain exports have decreased by 2.5% in the first half of 2018 compared to the first half of 2017 due to the drought, a 15% drop in international prices on the Chicago Stock Exchange and the reduction of shipments on the Paraná River, whose water level fell, rice exports have increased by 60% over the same period of time.

Over the past decade, Paraguay’s rice production has quadrupled. Paraguay’s recent dominance of the Brazil rice import market has caused Uruguay and Argentina to find new markets in Latin America, Africa, and the Middle East. Paraguay shipped nearly 80% of its exports to Brazil. It is interesting to note that among the major producers in South America, Brazil is the only country that not only exports but also imports rice.

Only 10 years ago, Uruguay and Argentina supplied more than 80% of Brazil’s rice imports. Last year as Paraguay’s share expanded, these 2 suppliers’ share declined to roughly 40%. However, these 2 countries have been able to capitalize on their port capacities to ship further distances and expand markets abroad (Iraq, West Africa). For instance, Peru is now the top export market for Uruguayan rice. They also have seen considerable growth in their exports to traditional U.S. markets such as Mexico and Costa Rica.

PARAGUAY – Land preparation at Salitre Cue farm (August 2018).

This season, we started very early with land preparation of the fields. Land preparation is important to ensure that the rice field is ready for planting. A well-prepared field controls weeds, recycles plant nutrients, and provides a suitable soil surface for direct seeding.

Land preparation covers a wide range of practices from zero-tillage or minimum tillage which minimizes soil disturbance through to a totally ‘puddled’ soil which actually destroys soil structure.

In order to optimise field-level management, we have adopted Real Time Kinematic (RTK) technology using GPS guidance systems to ensure we have the most accurate picture of the field and achieve the highest level of precision to create an accurate well balanced design. Basically, topographical data collected are then processed with a specific software to build optimal dig irrigation channels around the edges of the field with the tractors on autopilot. The system not only offer higher accuracy but also higher quality constructions while reducing the amount of time it takes to complete our land-leveling operations. All those information can also be reused for future seasons.

The use of the agricultural precision tool helps to ensure optimal water management by providing improvements in yields, water usage, and farm productivity. So far, 1,300 ha have been prepared and dig irrigation channels have been built over 650 ha, waiting for pre-sowing herbicides.