Little relief in sight for Argentina
The entire economy of Argentina is starting to feel the effects of the hot, dry weather that's been ruthless to the ag sector there in recent weeks and months.
A weekend that was filled with hopes of some relief in the form of rainfall around the country ended with little or no relief for the nation's parched farms, exascerbating fears of not just a complete crop failure there, but also growing affects on the economy, says Agriculture.com Marketing Talk contributor in Paraguay, Augusto Medal with Prytaneum Global Advisors.
"In the macro-economic picture for the country, this drought will cause headaches for the government and its fiscal budget, as it relies on withholding taxes on grain exports of up to 35%," Medal says. "The issue of lowering the withholding taxes is gaining momentum in the agricultural agenda for farmers due to their desperate situation of low yields that do not even cover the costs of their production."
Specific to the corn and soybean crops, at least some precipitation's expected in the next few days in spots around the nation, but even if those rains do fall, it could be too little too late on account of the current trend in temperatures, according to Don Keeney, meteorologist with MDA EarthSat Weather in Gaithersburg, Maryland.
"Temperatures were very warm across much of Argentina yesterday, with highs well into the 100s across nearly all of the region, with the exception of far southeastern Buenos Aires," Keeney said Tuesday morning. "This put temperatures an average of 10-20 degrees above normal! The very warm temperatures combined with significant dryness is resulting in notable yield reductions and stress on corn and soybeans."
Any relief from rains -- more of which are in the 6- to 10-day forecast for Argentina -- will likely be short-lived and will "allow any improvements from rains this week to quickly disappear, and stress to build again," he says.
And, that's bad news for the nation's farmers, who according to Medal have already lost between 50% and 100% of their corn and soybean crops.
So, will this week's rains bring any relief to Argentina's farmer? Looking ahead, Craig Solberg of Freese-Notis Weather, Inc., says that's not likely on account of the weather after the expected rainfall.
"Rains will work northward over the corn and soybean areas today and tomorrow before turning dry again on Thursday thru the weekend. Some southern areas of the important grain producing areas may receive some significant rains from these storms this week," Solberg said Tuesday morning. "A drier than normal weather trend is forecast to continue in these areas for the foreseeable future."