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10% of Argentina’s Soybean Crop Is Damaged, Experts Say
Fires and floods at the same time. That is what Argentina has faced in the last several weeks in different regions of the country, and that may push some grains higher, especially soybeans.
The fires were generated in the southwest parts of Buenos Aires, La Pampa, and Rio Negro provinces due to dry weather in the region, affecting nearly 3.4 million acres. There is not significant planting of soybeans or corn in those places, but there are mostly wheat crops and cattle farms in there.
While local authorities claim to have contained the fires, key soybean-producing regions have faced floods that may continue. The floods are concentrated in the northwest area of the Buenos Aires province, Entre Ríos, south of Santa Fe and south of Córdoba.
In some cases, there was more than 19 inches of rain in less than 30 days, and there are still forecasts for precipitation over the next 48 hours. According to the Buenos Aires Cereal Exchange, the planting had progressed to 92.9% of the surface at the time the floods came. Losses have yet to be determined, but indeed it will be necessary to replant some batches, and there will be a delay to finish planting. As of today, most estimates put the Argentinian soybean crop at 57 million metric tons. Approximately 740,000 acres are considered under serious risk of loss, while already 10% of the crop is considered in bad or regular condition.
“As the exportable supply of soybeans is concentrated in very few countries (U.S. + Brazil + Argentina = 80%), the oilseed complex will see more impact from these weather setbacks than corn in the international market, as reserves are lower,” says Guillermo Rossi, a grain strategist at Big River, a firm located in Rosario, northeastern Argentina.
In the specific case of General Villegas, in the northwest of Buenos Aires, there are some of the worst conditions in the country. Floods already started in this location prior to December, in October and November. They expect to lose up to 50% of all corn and soybean production and face a financial loss of over $300 million.
“Everything that was grown here is under water. We are facing time crunches, regarding the crops’ growing season. We hope to see it dry up, but as of now we think we lost this crop season,” says Guillermo Chapado, a farmer who is member of the Rural Society of General Villegas.
The Argentinian Agrarian Federation has requested immediate official assistance for the producers that suffered with "total losses” originating from floods and fires, and that should include “forage, logistical, and financial help.”
“We will not completely recover from this in four or five years,” a statement from the Federation reads. The government has announced a plan of subsidized credit rescue program to help mostly dairy and cattle farmers.