February 12, 2009

Post lowered its wheat and corn production estimates for Argentina's 2008-09 crops due to severe drought, according to a US Department of Agriculture attache report posted Wednesday (February 11) on the Foreign Agricultural Services Web site.

Post lowers its overall wheat production forecast for Argentina to 8.4 million tonnes (MT) in 2008/09 due to severe drought that impacted negatively on this year's crop, lowering both yields and area from the previous year. Previous higher estimates were based on good crop conditions in the southeastern wheat area. However, almost no rain occurred between October 2008 and the harvest in December, causing yields in that area to declined to lower than expected levels. Post maintains USDA's wheat harvested area forecast at 4.2 million hectares. Post forecasts a decrease in the overall wheat yields to 2 million tonnes per hectare. Wheat exports are expected to fall to 3.5 million tonnes as a result of the lower production, while domestic consumption is forecast to remain at the same level as estimated for 2008. Sources in the grain export sector report that the Argentina's Office of Agricultural Trade Control (ONCCA) has not been approving export licenses (ROEs) since the end of December 2008 in order to guarantee domestic supplies.

Post lowers its corn production forecast to 13.8 million tonnes for 2008/09 due to lower area and yields. Corn harvested area is forecast to fall to 2.3 million hectares as a result of losses due to the severe drought affecting almost 90 percent of the planted area in the province of Entre Rios and part of southern Buenos Aires. Extremely dry conditions and very hot days during the growing season have severely impacted corn fields in the rest of the corn planting area in the province of Buenos Aires and Santa Fe. As such, Post lowers its overall yield forecast to 6 million tonnes per hectare. 2008/09 export forecast is to decrease to 7 million tonnes to compensate for lower expected production.

From January 15 to 19, Post officials toured the corn growing areas of Argentina located in Rojas-Salto-Pergamino in the province of Buenos Aires. Post officials also visited the province of Entre Rios (Victoria, Gualeguay and Gualeguaychu) one of the provinces most affected province by the drought. Both areas had a 50 percent rainfall deficit compared with 2007. However, heavy clay soils in Entre Rios dried out faster than in Pergamino, causing more damage in that province. While in Pergamino corn is expected to reach the harvest, Entre Rios has lost up to 90 percent of its 160,000 hectares initially planted and most farmers there have utilized it as forage for their cattle.

From January 25 to 30, Post officials travelled from Buenos Aires City on highway 7 to Junin and Lincoln in northwestern Buenos Aires, Rufino and Venado Tuerto in the province of Santa Fe, to Vicuna Makena, Washington and Villa Maria in Cordoba province and returning to Buenos Aires City through Marcos Juarez in Cordoba and Rosario, in the province of Santa Fe. This area has received timely rains and most of the corn fields are considered in reasonable shape with some fields close to maturation due to hot days and scattered rains during January.