The world is depending more than usual on growers like Juan Francisco Arregui in Argentina’s breadbasket farmlands to meet a supply gap of the grain needed to create bread and flour these days, but drought is only the beginning of their troubles.
In a field that was dusty and had not seen rain in two months, Arregui told the journalists, “This season for wheat is complicated.” He stated that the crop needs rain to come soon, but the weather predictions were not looking good.
He and other farmers in Argentina, the world’s No. 6 exporter of the crop, are shifting more acreage to soybeans and less area to wheat due to the extended dry weather, rising fertilizer prices, and political uncertainty about export regulations.
Although there was sufficient moisture to plant the seeds, he noted that “not much is left.” “It implies that the wheat crop is by no means certain. We can start it, but then we have to wait for rain.”
Argentina’s 22.4 million tonne wheat harvest in 2021–2022 was a record, and the world’s grain markets had anticipated that the nation might help make up for the grain lost due to Russia’s invasion of Ukraine. Prices have soared as a result of the rivalry between the two main exporters of wheat.
However, the wheat planting projections have already been reduced by both Argentina’s major commodities markets, Buenos Aires and Rosario, and further cuts have been advised against if the weather does not improve.
“Today, any problems with wheat are more significant and result in bigger losses. What we are witnessing is that “According to Cristian Russo, head agronomic at the Rosario grains exchange, the best-case scenario yield is 18.5 million tonnes.
The exchange has issued a warning on the worst wheat planting circumstances in 12 years and claims that the dryness has caused sowing to stall at 65 percent, putting vacant lots at danger.
The forecast for the weather is not good.
Buenos Aires-based meteorologist Leonardo De Benedictis stated, “In the medium term, the rain trend is still quite rare,” adding that there may be a few isolated, small-scale showers.
The conflict between Russia and Ukraine has increased the cost of fertilizer in addition to raising questions about global food security and fanning inflation.
Due to the loss of Russian fertilizer, farmers in South America and the United States have suffered. Russia is a significant global provider.
According to Arregui, he paid $1,600 per tonne for phosphate fertilizer this season, more than double what he paid at $700 a year earlier. His urea price increased to $1,100 per tonne, doubling. He was being pushed away from wheat and toward soy because it required less investment.
Government interference worries also loom significant. Argentina’s government is working to control the country’s 60 percent inflation rate. Although there is not enough support in congress for that action, the administration has maintained a lower ceiling on wheat exports than last year, increased export levies on soymeal and oil, and threatened additional taxes for wheat.
The current restriction on wheat exports for the 2022–2023 cycle is 10 million tonnes, down from 14.5 million tonnes in the last cycle, however this limit might eventually be increased.
In reference to changing government policy, farmer Arregui observed, “Here you go to bed on a Sunday and on Monday you don’t know what news you’re going to find.”
“They make decisions every day that have an indirect impact on what you do, and because of the horrible unpredictability involved, nothing can be planned. You pay a hefty price for it each day.”
