Situation/weather: Rains are back but remain still below the historical average for the season. Cumulative rainfall for July-April were 38% below the normal level. Stronger rains are forecasted in July. Winter period should also be warmer than usually. Short term, rainfall helped the regrowth of the pasture which were lacking. Soil will need time to recover from the intense drought the region faced earlier.

Cattle operation: We have around 6,000 heads at the farm, in fantastic shape as you can see. We are currently testing pregnancy of heifers previously inseminated. So far, we have registered around 2,000 births.

In terms of beef production, we reached 53% of the annual objective by end of April with 325 tons of production. Given the drought and all its implications, we will not be able to reach our annual beef production objective of 620 tons. However, we could maintain a high pregnancy ratio and a great shape of the herd which is essential to generate future incomes.

As previously mentioned, we are in the peak season of cattle sales. During May, we are going to sell 220 female calves and 260 calves. Market prices are at their peak (they could be higher if quotas were lifted). After 2 complicated years for the sector, economical results are improving and again profitable, the, although uncertainty persists due to the strong volatility and high prices of grains. Meanwhile, breeders highlighted the good wintering prices and the importance of beef exports to China.

Weather/Situation: We registered some more normal rains in April but still below the historical average for the same period (-42%). We were expecting that those rainfalls will help to boost the pasture regrowth but it benefit mainly to the regrowth of the natural vegetation (wild bushes, typical for the region of Salta which was formerly a forest area). Those subtropical wild plants are directly competing with pasture and as they need less water to develop, reducing the pasture area for cattle.

Vegetation control: Last year we perform a cleaning operation over 450 ha with machine, and 1 year after we can notice improvements’ in some plots but immediate regrowth in others. You can see below the difference between a plot cleaned last year and another 3 years ago.

Our case is not unique as our neighbours’ are facing the same situation. The only way some of them could “control” the situation is trough a massive use of chemical combined with manual cleaning operations. However, results are not homogenous and various chemicals have to be tested before as each field reacts differently. Not only such intensive use of chemicals has a cost (emphasized in the current environment) but has also incidences on the environment. As a corporate standard, we always tried to have a moderate use of chemical and rather use machine. Therefore, we are analyzing the opportunity to clean further 200 ha of fields and clean up by bulldozer the surface performed last year (450 ha).

Cattle operation: We have around 2,400 heads at the farm, mostly cows, heifers and calves. Our cattle is in good shape given the fact we were affected by dryness over the last 18 months. You can see below various categories of animals.

Our main difficulty here is to manage food: pastures area have been reduced due to drought/lack of water and the fast regrowth of the natural vegetation. Silage costs are also booming on the market (pellets) driven by increasing prices of cereals (+45% over the year). As a result, our beef production will be off by 70% in terms of kg (240 t budgeted).

Driven by all reasons mentioned above, we have decided to realize early sales of non-productive, empty or old cows in order to reduce feed and water use. The sale value of those animals will be higher than to keep them for another service, especially when meat prices raises significantly (+18% YTD) as it is the case currently.

Situation/weather: Autumn is coming, and rainfall conditions are gradually normalizing but still remain below the seasonal norms. The Province of Corrientes has recorded its worst drought in 40 years. For livestock activities, it takes about 18 months to compensate such situation (production cycle, pastures, soils, water reserves). It’s the 2^nd successive year of drought that we faced.

Cattle operation: We have currently above 6,100 heads at the farm. We have entered in the peak season of cattle sales.  We have planned to sale around 900 heads in the coming months (mostly female and male calves). You can see below 360 beautiful male calves being prepared for delivery.

Even if the exports quotas remain in place, prices have nicely increased over the latest months (+15%) and reached their 20-years historical highest. However, that doesn’t mean that profitability boomed. On average, costs of production have increased by 50% (inflation of salaries, +39% for gasoil, booming supplementation costs driven by high grains and oilseeds prices).

For the global overview, International beef prices will remain very firm, not only because of demand (China) but also because of the additional pressure exerted by price increases in grains and oilseeds, and energy, which will further impact the price of other types of meat, such as poultry and pork, whose production is more vulnerable to cost increases.

2-years steers prices (USD/Kg)

Argentina can position itself within a very limited group of countries that can continue to provide meat, based on pasture. A great opportunity for Argentina!

Weather: Cumulative rainfall for July-February period was 273 mm, -53% compared with the historical average for the same period. Drought has plagued the northern region since March 2021. Even if we are still facing heat waves, the good news is that we get again some rainfalls which immediately boosted the pasture in some plots. As autumn progresses, rainfalls are expected to gradually normalize.

Cattle operation: We have around 2,500 heads at the farm, mostly cows, heifers and calves. Dryness has affected the whole region for the last 18 months and has affected the shape of our herd at various levels (well-being, production, diet, fertility, etc) as well as pastures available.

We have around 1,100 cows and heifers’ and we are expected a bit more than 1,600 births between the 1^st and 2^nd spring service. We are performing an early weaning over 320 baby calves. Below you can see some weaned calves and on the 2^nd video, none weaned calves. Early weaning has become a drought management tool. It provides the most cost effective way of maintaining cow condition to ensure that they get back in calf at their next joining.

In drought situations, early weaning enables you to use containment areas to reduce grazing pressure on pastures and control the risk of erosion. For us, it enables also an earlier sale of non-productive, empty or old cows reducing feed and water use. The sale value of those animals will be higher than to keep them for another service, especially when meat prices raises significantly (+18% YTD) as it is the case currently.

Under the challenging weather conditions we experiment, it is worth to perform the analysis of doing earlier sales of females or calves rather than to keep them and increase your costs (supplementation, vet, etc). It takes 18 months to recover from an intense drought as we faced. Therefore, we are in the process to sale between 350/400 calves in advance.

We are also analyzing the opportunity to clean further 200 ha of fields. Previous operation done give decent results (450 ha cleaned) and the farm needs permanent control of the natural vegetation which is typical for the region of Salta (a formerly forest area with a subtropical highland climate).

Situation/weather: We are facing an extremely hot and dry summer. Argentina, Chile, Uruguay, Paraguay, southern Bolivia and southern Brazil have reported temperature anomalies of +10/+15°C, regionally in La Plata region above +20°C from long-term averages. These conditions mean temperatures around +48°C in northern Argentina.

We have 2 farms located in Corrientes Province: Curupi Pora (10,275 ha – 6,500 heads) and Tata Cua (750 ha – forest). The current situation is very stressful for both our livestock activity and our forest as fires are ravaging hundreds of thousands of hectares of land in province. More than 800,000 ha of land have now been consumed by flames so far (Article from Infobae, dated 18/02/22).The fires are burning at a rate of 20,000 ha per day, destroyed plantation (rice, corn, soybean, pastures). At least 70,000 heads of cattle have been killed. The province is currently recording rainfall of less than 10 mm versus 200 mm on the average for the season and a relative humidity of 15% when the usual would be around 70%.

Cattle operation: Heat weave are stressing the animals at various levels (well-being, production, diet, fertility, etc.). Grassing area are minimal due to the high temperature, forcing us to supplement the more sensitive categories and our water lagoons which are helping to refresh the heard, are almost empty. The situation is very complex and will affect not only productivity but also the body conditions of the animals for a while (Article from Infobae, dated 18/02/22).

Forestry: All our staff is in alert so as our neighbours for the detection of early fires. We have already experiment a strong fire in august 2020 which have strongly damaged our eucalyptus and pine tree plantation.

Corrientes Province Governor Gustavo Valdés has declared a state of emergency which will allow the use of emergency aid for operators like us.

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…

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.

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.

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.