Rice harvest has restarted at the farm. We are expecting a good harvest in terms of yield (> 7 t/ha) and quality as we didn’t faced any water shortage during the irrigation period considering our seeding strategy.

Given the hydrological forecasts for the season and boom in input prices, we have decided with our partner GPSA only to sow 390 ha of rice for this cycle. Indeed, we were right given the drought faced in the region. We could fully mitigate our risk by using the water of our artificial lake of 480 ha to fully irrigate for the entire period our rice fields. Paraguay, South of Brazil, Uruguay and Argentina faced one of the worst droughts in recent memory which will deeply impacts farm exports. For example, the Buenos Aires Grain Exchange forecasts a further 20% drop in soybean and corn production for the season.

As a result of the drought, paddy prices should be at a high level for this season.

Situation/weather: We have recently registered some heavy rains so as in Argentine Mesopotamia (Misiones, Corrientes, and Entre Ríos) and also in southern Brazil which fit for once with our irrigation period of the rice. The region is again facing the consequence of La Niña weather pattern. Lot of concerns have already expressed after the downspout at the Paraguay River nears its third consecutive all-time low. The low water level has a direct impact on navigability, which, in turn, raises freight costs.

Rice: Given the hydrological forecasts for the season and boom in input prices, we have decided with our partner GPSA only to sow 390 ha of rice for this cycle. If for whatever reason we would face any shortage in rains or pumping restriction on the river, we could fully mitigate our risk by using the water of our artificial lake of 480 ha to fully irrigate for the entire period our rice fields. So far, the weather gave us reason.

All rice fields sowed are in very good conditions as you can see. We are in the pick of the irrigation period and have a very uniform crop.

Corn: In addition to rice, we have decided with our partner to sow 488 ha of corn this year as a rotation to soybean. We are in the process to finish with the sowing and the crop is emerging in the early field sowed as you can see.

When the weather is at its worst… from drought to excess rains in the peak season of sowing! We had no other choice to start sowing in November (03/11/22) as we registered several strong rains in October making it impossible to seed soils. Activities like pre-sowing fertilization, herbicide application, taipas nivelation as well as sowing are impossible under those conditions.

We are now performing the sowing of 400 ha of paddy rice. Given the weather forecasts for the coming months (La Nina), we are not planting more rice this year. Paddy crop is strongly influenced by water supply and water should be kept standing in the field throughout the growth period. Continuous flooding helps ensure sufficient water (elimination of moisture stress and favourable micro-climate to crop production) with greater availability of nutrients such as phosphorus, iron and manganese and control weeds.

Therefore, we have decided with our partner not to sow more than the surface which can be irrigated by our artificial lake during the full cycle.

Weather: After having faced the worst extended “extreme drought” in 50 years, we faced torrential rains… from one extreme to the other as you can see.

The good news is that the level of the river Tebicuary rose significantly and that we are again authorized to pump water. It is key for us as we need almost 3 months to fulfil our artificial lake of 480 ha. Given the extreme drought faced earlier, a commission of the Congress has been mandate to evaluate the incidence of farming activates on the flow and water level of rivers. Likely, we have to anticipate more regulation which will force all crops producers to raise their environmental standards. However, we hope that those measures will remain pragmatic.

Soybean: Among the 1,100 sowed, 350 ha have been harvested with a yield of 0.4 t/ha. Further 300 ha have to be abandoned as they have been burned. This is a direct consequence of the drought. As for the 400 ha remaining, our expectations are low given the strong storms and flood registered in the farm.

Our case is by far not isolated: at this stage of the harvest, national soybean yields are around 1.1t/ha with regions like ours where the average yields is between 300 and 500 kg/ha (see Article from APS dated 01/03/22). The positive news is that soybean price quote above $640/t.

Weather: Even if we are still facing very hot days, we have finally registered some rains. According to the latest weather forecast for March and April, more normalize conditions could begin but rainfalls will remain below normal parameters. The rice season is entering in is commercial stage and soon we will begin with the soybean harvest.

Rice: So far, we have harvested around 350 ha among our 560 ha sowed. Yield have improved in the latest plots sowed; we are now with a 6.6 t/ha yield (dry) with a very high quality for the latest block harvest (all above a purity index of 58).

We are pleased with those results as we were expecting lower yields as the plots suffered from water shortage due to the extreme drought we faced. However, the grains reached their physiological maturity as their humidity level is around 26%. 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.

Local rice prices remain also attractive as market prices are above $240/t for standard quality (+14% above budgeted price). It is a small consolation because we were able to sow only 35% of our 1,638 ha rice area given the drought forecast. Price effect will not compensate for volume losses.

Soybean: By end of March, we are going to start the harvest of our 1,100 sowed. Around 300 ha have been affected by the drought and reduced our overall yield forecast from 2.5 t/ha to 1.5 t/ha. However, soybean price have recently boomed (>$600/t Vs $350/t budgeted) due to the Ukrainian situation and the impact of drought on the crop in South America. Price effect here compensates yield losses.

According to the country’s Ministry of Agriculture, Paraguay soybean processing production has decreased by almost 50% compared to the previous harvest cycle. The Paraguayan Chamber of Oilseeds and Cereals processors (Cappro) estimates that total production will decrease by 60% this year because of the lack of rain.

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 1^st 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.

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.

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.