Argentine farmers may be keener than other commentators believe to plant wheat, officials said, but acknowledged that dryness poses a threat to seedings prospects.
Growers’ preliminary planting intentions “would indicate an area that, in principle, would be similar to that of the previous campaign” for the 2022-23 wheat crop, for which harvesting will start late in calendar 2022, Argentina’s farm ministry said.
The wheat sowings campaign, which has just started, will end up at 6.75m hectares, unchanged year on year, the ministry said – a forecast above expectations from the likes of the US Department of Agriculture which sees a decline to 6.30m hectares.
The Rosario grains exchange pegs 2022-23 plantings at 6.35m hectares, a figure which on its estimates represents a 550,000-hectare decline year on year.
‘Significantly inferior’
However, the ministry acknowledged that its forecast was “subject to the occurrence of rainfall to improve soil moisture, mainly in the central-north region of the country”.
Argentina has been dogged by dryness which – while beneficial for the ongoing corn and soybean harvests, and indeed for fieldwork to enable wheat sowings – is raising some concerns over germination and establishment prospects, with weather viewed by many observers as cooler than ideal too.
The Rosario grains exchange said that while sowings in central and southern regions, “especially in the west of Buenos Aires and Entre Ríos”, were starting amid “better” soil moisture levels than a year ago, in the rest of Argentina, initial conditions “are significantly inferior”.
Whereas April 2021 bought the likes of Cordoba and Santa Fe “very important” pre-planting rains, of 250mm (1 inch) or more in some regions, last month’s precipitation fell up to 150mm short.
‘Even worse than disaster year’
“Where the difference is most noticeable is in Córdoba,” which vies with Santa Fe to be the second-ranked wheat-growing province, after Buenos Aires, “where wheat planting begins with the entire province at dry and very dry levels”, the exchange said.
In Cordoba, “the conditions are even worse than in 2020, a disaster year” for the province’s wheat crop, which achieved a yield of just 1.5 tonnes per hectare.
Surveys of farmers in the province indicate that “there is no water, nor desire to grow wheat”, the exchange said, foreseeing a drop of 250,000 hectares to 1.1m hectares in Cordovan sowings.
The exchange – forecasting a 19m-tonne crop, down by 3.1m tonnes on its estimates – cautioned too of a potential yield loss as high fertilizer prices prompt farmers to ration nutrient use.
Export taxes
The Argentine farm ministry stopped short of releasing a forecast for 2022-23 wheat production.
It also estimates the 2021-22 crop at 22.1m tonnes.
The ministry made no comment either on Argentina’s crop export taxes, and their impact on sowings.
Argentina’s president, Alberto Fernandez, on Friday proposed raised export tariffs as a means to help curtail domestic inflation, which is approaching 21%, although admitted that he lacked support from Congress to back such a move.
The government – which in March lifted export levies on soyoil and soymeal by 2 points to 33%, matching the soybean tariff – taxes wheat, and corn, shipments at 12%.
The severity of relative tax regimes between crops has historically proved an influence on growers’ sowing decisions.