ARGENTINA- Wheat production in Argentina is likely to rebound in the marketing year 2023-24 following a dismal summer 2023 crop season caused by drought and a late frost; a report from the Foreign Agricultural Service (FAS) of the US Department of Agriculture provides.
According to the report, the production estimate is 19.5 million tonnes on 6.5 million hectares(HA). However, the FAS said more rains are needed to recharge soil moisture profiles before the June planting window.
Many highly productive areas, such as northern Buenos Aires, southern Santa Fe, and Cordoba, need good rains before late May, or planting could be risky.
“Most farmers are reluctant to plant under these conditions as last year those who planted in dry conditions obtained poor results. If plentiful and widespread rains don’t materialize in the areas that currently lack moisture, we could expect planted acreage to drop roughly 1.0 million HA,” the FAS said.
Additionally, the financial condition of many producers after the past poor harvest might affect the final planted area as these farmers could find it hard to get financing to pay rents and inputs.
It will be especially so for farmers who produce on rented land, which accounts for approximately 70 percent of the country’s cropland.
Moreover, last year’s crop casts doubts about the availability of good-quality seeds for planting.
Argentine wheat exports in MY2023-24 are projected to more than double the exports expected in 2022-23, reaching 13.7 million tonnes.
“This would be the result of recovered production, practically flat domestic consumption, and most likely lower ending stocks,” the FAS commented on the supposed third-highest export level on record.
Conversely, exports for 2022-23 are estimated at 5.8 million tonnes, the lowest in the past eight years.
The FAS report estimates domestic wheat consumption for 2023-24 will remain relatively unchanged from the previous year, projected at 6.5 million tonnes.
Official data provides that in 2022, wheat accounted for 36% of all grain milling in the country.
According to the FAS report, the main consumers of wheat flour are traditional bread bakeries and manufacturers of dry pasta, cookies, and crackers.
The report also points out that wheat consumption is relatively inelastic despite high inflation, which has recently exceeded 100 percent annually.
“While it is now commonplace to see gluten or wheat-free products advertised on restaurant menus and in stores, gluten-free diets unrelated to a medical diagnosis are not as popular as they were a few years ago,” the FAS provides.
Corn and Barley to reach record levels
According to the FAS, corn production in 2023-24 is likely to reach a record 54 million tonnes, up from estimated 36 million tonnes in 2022-23.
However, the FAS holds that estimates are challenging this year due to drought, high temperatures for long periods, unusually early frosts, and spotty scarce rains.
Similarly, barley production for MY 2023/24 could be 12% higher than the previous season, reaching 4.5 MMT despite a drop in planted area to 1.2 million HA.
Akin to wheat production, barley, and corn production was affected by dry conditions and late frosts in the previous seasons. The estimated increase in production can be attributed to farmers looking to recover economically on attractive returns.