ARGENTINA – Argentina’s wheat production outlook for the 2023-24 marketing year has improved as the US Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) revised its estimates lower in response to prolonged dry conditions.
Typically the largest wheat producer and exporter in South America, Argentina has been grappling with a three-year drought crisis.
In its latest report, the FAS reduced its projections for Argentina’s wheat output by 2 million metric tons, revising it to 14.5 million metric tons, which is still 2 million metric tons higher than the previous year’s drought-affected crop.
“Analysts and producers are still evaluating the negative impact of frosts in early October, which could further diminish production,” The FAS noted.
The report also highlights that the average yield is estimated at 2.6 tons per hectare, marking a 13% decline compared to the average yield of the past decade.
Wheat exports from Argentina have also been adjusted downward by the FAS, with a new estimate of 10 million metric tons, including flour products.
While this figure is 1.5 million metric tons lower than the previous projection, it represents a substantial increase compared to the 3.9 million metric tons exported in the 2022–23 season. In the 2021–22 season, Argentina exported 16 million metric tons of wheat.
The ongoing challenges of drought and frosts have left Argentina’s wheat industry facing uncertainty, with the hope that improved conditions and measures will help mitigate the impact on the agricultural sector soon.
However, El Niño conditions expected to emerge in the Southern Hemisphere’s spring and summer fully usually lead to above-average rain in parts of Argentina.
Argentina is the second-biggest wheat producer and exporter in the Southern Hemisphere, after Australia, and plays a critical role in global supplies.
Meanwhile, the estimate for sorghum was bumped up to 3.2 million tons from the official estimate of 2.5 million on higher than anticipated planted area as Argentina tries to meet increased demand from China. Argentina’s 2023/24 sorghum exports are seen at 1.3 million tons.
Additionally, Argentina is also the world’s leading exporter of processed soybeans and a significant corn supplier. Still, its production of grains has been hurt by severe drought and other damaging weather events, causing significant losses both for farmers and the cash-strapped government.