Grain and Feed Update

An Expert's View about Agriculture and Animal Husbandry in Argentina

Posted on: 27 Nov 2011

Post's wheat production is at 13.0 million metric tons (MMT), lower than USDA's number as a result of dry weather during winter affecting key production areas. Sorghum area for 2011/12 is up at 1.0 million hectares, due to favorable market conditions and the expectations of somewhat dry weather. Barley area is estimated at 1.0 million hectares, an increase of approximately 30 percent from the previous year.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: GAIN Report Number: Argentina Grain and Feed Update 2011 Approved By: Melinda Sallyards Prepared By: Ken Joseph Report Highlights: Post's wheat production is at 13.0 million metric tons (MMT), lower than USDA's number as a result of dry weather during winter affecting key production areas. Sorghum area for 2011/12 is up at 1.0 million hectares, due to favorable market conditions and the expectations of somewhat dry weather. Barley area is estimated at 1.0 million hectares, an increase of approximately 30 percent from the previous year. The Government is working on a new commercialization system to improve the market of wheat and corn. Post: Buenos Aires Author Defined: Wheat: Post's production for 2011/12 is at 13.0 MMT, 500,000 MT lower than USDA's number. After a dry winter in several parts of the growing region, spring rainfall alleviated stressed wheat but yields will still be negatively affected especially in Cordoba province and in the south western part of Buenos Aires province. The south-eastern area of Buenos Aires province, the main producing area is in good condition and benefiting from good humidity throughout the crop cycle. The harvest has begun in Northern provinces. Post adjusted production upwards at 15.5 million metric tons (MMT) for 2010/11 based on slightly higher yields than expected. Exports are expected up at 9.2 MMT. Ending stocks are estimated at 1.8 MMT, but they could be somewhat larger as many farmers still have significant volumes stored on-farm. Barley: Planted area for 2011/12 is estimated at 1.0 million hectares, an increase of over 30 percent compared to last year. The main reason for such an increase is that barley prices are currently higher than wheat and it is easier to market as it is not controlled by the government. Another important factor is that in southern Buenos Aires province farmers harvest 15-20 days earlier than wheat and can advance the planting of second crop soybean, reducing the risk of yield loss due to frost at harvest time. Corn: Area for 2011/12 increased to 3.8 million hectares, more than USDA's number. Production is forecast at 27.5 MMT. Most weather forecasters expect a mild La Nina for Argentina, which could mean drier weather than normal. The main central corn production area suffered a dry winter, but some spring rainfall has somewhat replenished soil humidity which was very beneficial for planted corn and for farmers to finish their sowing. During the dry winter, many producers decided to stop planting corn (in September/October) and plant a late crop in December to avoid flowering in the hottest and normally drier month of January. A higher production is expected to supply higher surpluses for export, with total shipments at 19.5 MMT. There continues to be expectations of corn exports to China, which local traders estimate could range between 2-3 million tons in 2012. The Argentine government is confident that in the next few months it will reach an agreement on a sanitary protocol with its Chinese counterpart. China currently restricts imports of GMO corn from Argentina. Post increased corn area for 2010/11 at 3.4 million hectares, still 200,000 hectares lower than USDA's number, with total production at 22.5 MMT, the same as USDA. Corn exports are projected at 14.5 MMT, of which exporters to date have already purchased about 14.0 MMT. Exports are not larger because we estimate the government will want to keep a good stock for the domestic market. Sorghum: Harvested area for 2011/12 is increased to 1.0 million hectares, with a total production expected at 4.2 MMT. Sorghum prices have lately been higher than those of corn as its commercialization is not controlled. Furthermore, under a dry weather pattern, some farmers prefer to plant sorghum instead of corn since it is more resistant to drought. Sorghum production costs are significantly lower than corn. Area for 2010/11 is set at 950,000 hectares, lower than USDA's figure, with production also lower at 4.0 MMT. Rice: Area for 2011/12 is estimated slightly up from USDA's number at 235,000 hectares, with production at 975,000 MT. Area in 2010/11 dropped significantly as many small and medium producers using pumps for irrigation will switch to less costly soybeans. Producers using natural ponds will continue in the business. Policy: There are strong rumors indicating that the government will soon implement a new marketing system for wheat and corn in order to improve the current system which producers claim works against their interests. This system presented by a farmer?s cooperative needs the approval from the Ministry of Agriculture. Farmers claim they receive lower prices than what they should because exporters and wheat mills do not compete while purchasing the production. Mills are guaranteed sufficient wheat to mill and exporters are allotted tranches throughout the year. Many producers waiting for better market conditions store part of their production, putting more downward pressure on prices. Under the new system producers will receive a certificate for their declared production and will be obliged to market 40 percent of it in the local market and the balance can be freely exported. There are still many doubts about its final implementation, but most contacts believe that even though they would prefer a free market, the proposed system is better than the current system. If implemented successfully, we foresee lower ending stocks, freeing larger volumes for exports. Production, Supply and Demand Data Statistics: Wheat A 2009/2010 2010/2011 2011/2012 rgentina Market Year Begin: Dec Market Year Begin: Dec Market Year Begin: May 2009 2010 2011 USDA O New P USDA ost fficial O N USDA ew Post New Post fficial Official Area Harvested 3,650 3,650 4,400 4,400 4,700 4,600 Beginning Stocks 1,285 1,285 1,364 1,364 1,494 1,793 Production 11,000 11,000 15,000 15,500 13,500 13,000 MY Imports 3 3 5 4 5 5 TY Imports 3 3 5 4 5 5 TY Imp. from U.S. 0 0 0 0 0 0 Total Supply 12,288 12,288 16,369 16,868 14,999 14,798 MY Exports 5,099 5,099 9,000 9,200 7,500 7,700 TY Exports 5,172 5,255 7,738 7,750 8,000 6,800 Feed and Residual 25 25 25 25 25 25 FSI Consumption 5,800 5,800 5,850 5,850 5,900 5,900 Total Consumption 5,825 5,825 5,875 5,875 5,925 5,925 Ending Stocks 1,364 1,364 1,494 1,793 1,574 1,173 Total Distribution 12,288 12,288 16,369 16,868 14,999 14,798 Yield 3. 3.0137 3. 3.5227 3. 2.8261 Corn A 2009/2010 2010/2011 2011/2012 rgentina Market Year Begin: Mar Market Year Begin: Mar Market Year Begin: Mar 2010 2011 2012 USDA O N SDA ew P Uost N USDA ew Post fficial Official O New Post fficial Area Harvested 2,750 2,700 3,600 3,400 3,600 3,800 Beginning Stocks 976 992 892 895 1,302 1,605 Production 23,300 23,300 22,500 22,500 27,500 27,500 MY Imports 7 7 10 10 10 11 TY Imports 4 7 10 10 10 11 TY Imp. from U.S. 1 1 0 1 0 1 Total Supply 24,283 24,299 23,402 23,405 28,812 29,116 MY Exports 16,491 16,504 15,000 14,500 19,500 19,500 TY Exports 16,971 16,973 15,000 14,000 18,000 18,000 Feed and Residual 5,000 5,000 5,100 5,300 5,500 5,600 FSI Consumption 1,900 1,900 2,000 2,000 2,100 2,100 Total Consumption 6,900 6,900 7,100 7,300 7,600 7,700 Ending Stocks 892 895 1,302 1,605 1,712 1,916 Total Distribution 24,283 24,299 23,402 23,405 28,812 29,116 Yield 8. 8.6296 6. 6.6176 8. 7.2368 Sorghum A 2009/2010 2010/2011 2011/2012 rgentina Market Year Begin: Mar Market Year Begin: Mar Market Year Begin: Mar 2010 2011 2012 USDA O N USDA ew Post N USDA New ew Post fficial Official Official Post Area Harvested 751 800 1,000 950 850 1,000 Beginning Stocks 194 194 152 149 552 350 Production 3,629 3,629 4,400 4,000 4,000 4,200 MY Imports 0 1 0 1 0 1 TY Imports 0 0 0 1 0 1 TY Imp. from U.S. 0 0 0 0 0 0 Total Supply 3,823 3,824 4,552 4,150 4,552 4,551 MY Exports 1,771 1,775 1,900 1,800 1,900 2,000 TY Exports 1,507 1,509 2,000 1,900 2,000 2,000 Feed and Residual 1,700 1,700 1,900 1,800 2,000 2,000 FSI Consumption 200 200 200 200 200 200 Total Consumption 1,900 1,900 2,100 2,000 2,200 2,200 Ending Stocks 152 149 552 350 452 351 Total Distribution 3,823 3,824 4,552 4,150 4,552 4,551 Yield 5. 4.5363 4. 4.2105 5. 4.2 Rice, Milled A 2009/2010 2010/2011 2011/2012 rgentina Market Year Begin: Apr Market Year Begin: Apr Market Year Begin: Apr 2010 2011 2012 USDA New USDA New USDA New Official Post Official Post Official Post Area Harvested 215 215 250 256 210 235 Beginning Stocks 120 120 75 74 223 225 Milled Production 706 706 1,118 1,118 901 975 Rough Production 1,086 1,086 1,720 1,720 1,386 1,500 Milling Rate (.9999) 6,500 6,500 6,500 6,500 6,500 6,500 MY Imports 7 8 5 8 5 8 TY Imports 7 7 5 7 5 7 TY Imp. from U.S. 0 0 0 0 0 0 Total Supply 833 834 1,198 1,200 1,129 1,208 MY Exports 488 430 625 625 600 650 TY Exports 468 468 600 600 600 650 Consumption and Residual 270 330 350 350 355 380 Ending Stocks 75 74 223 225 174 178 Total Distribution 833 834 1,198 1,200 1,129 1,208 Yield (Rough) 5. 5.0512 7. 6.7188 7. 6.383
Posted: 27 November 2011

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