2022-23 South American Update

News and notes from South America

Changing weather patterns

Farmers in the South American country of Argentina have struggled through severe drought in recent years thanks to multiple years of La Niña. Mark Brusberg, USDA chief meteorologist, recently spoke at the United States Department of Agriculture’s Ag Outlook Forum. He said the pattern may finally be changing for Argentina.

“The good news for some of these producers is we are now forecast to go into an El Niño. What does that mean? They look forward to this circulation pattern,” Brusberg said. “Now this is completely the opposite of what you would expect to normally happen. You’ve got reverse flow all over the place, but interestingly enough, the impacts really are the opposite of what you get during a La Niña. And in the case of Argentina, you would expect wetter than normal conditions.”

Brusberg said this is reason for some optimism ahead in Argentina for improving yields. 

“What we’ve seen in past years in Argentina is that the years after La Niñas they tend to rebound.… Continue reading

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Agave program to enhance sustainability of energy markets

By Guil Signorini, Department of Horticulture and Crop Science, The Ohio State University

Brazil is frequently in the media spotlight to illustrate arguments on environmental issues and policies. The news often comes across as a set of bitter comments on weak institutions or the country’s inability to monitor and safeguard its forests. I put this conversation aside and invite the interested reader to focus on a positive analysis regarding energy supply and sustainable alternatives.

Applied economists, myself included, have published articles describing the history that led Brazil to hold one of the most sustainable energy mixes in the world. Despite challenges in revamping outdated macroeconomic policies and reducing the involvement of the central government in market matters in the past, citizens of the country today consume electricity that is 92% renewable. Hydroelectric plants have led the generation capacity charts since the 1980s, while more recently, windmills and biomass-based plants have increased their participation.… Continue reading

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Bumper soybean crop starts pressuring prices in Brazil

By Daniele Siqueira, AgRural Commodities Agrícolas

January has come to an end with Brazil’s 2022/23 soybean harvest behind schedule. According to AgRural, 5.2% of the area had been harvested by Jan. 26, compared with 10.4% a year ago and 6.6% in the five-year average. That means that approximately 8 million metric tons had left the fields by the date, below the 14 million metric tons harvested in the same period last year, when production was smaller due to drought, but the harvest was progressing more quickly.

The delay is caused by constant rains in top producer Mato Grosso and slower-than-normal crop development due to overcast skies in late 2022 in other states, especially in Paraná, Brazil’s number two producer. Although Brazilian farmers can catch up as soon as the weather conditions allow them to do so, the harvest delay impacted the export pace in January and will probably cause logistical bottlenecks in February and March.… Continue reading

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Argentina’s soybean dollar program and impact on global supply

By Guil Signorini, Department of Horticulture and Crop Science | The Ohio State University

The macroeconomic policy in Argentina and their government’s strategy to improve the central bank’s financial reserves have crossed paths with agribusinesses and the production of commodities. The country has been grappling with high inflation rates and a weakening exchange rate of the Peso against the United States Dollar for several years, but the situation has worsened more recently.

Most countries around the globe were affected by inflation following the pandemic years as a collateral effect of social stimulus plans and disrupted supply chains. Currencies of developing countries devalued consistently against the Dollar and investors left to seek stable markets. Yet, Argentina’s economy has taken a darker turn than most. Its currency continues to depreciate at unprecedented rates. On Jan. 10, 2023, one U.S. Dollar was equal to 180 Pesos, compared to 60 Pesos per Dollar in January 2020 — a threefold depreciation in three years.… Continue reading

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When will Brazilian farmers sell their bumper soybean crop?

By Daniele Siqueira, AgRural Commodities Agrícolas

I am writing this article in late December, a time of the year when Brazil is starting to harvest the very first soybean fields of the season — although more significant progress is expected to be seen only in mid-January, as it normally happens. Despite some losses caused by spotty rains in western Paraná, where harvest starts in January, and concerns about below-normal rains in Rio Grande do Sul, where most of the crop is still in vegetative and early reproductive stages, the expectation is for a bumper 2022-23 production.


INMET Millimeters.

If weather conditions improve in dry areas in the south of the country and remain favorable in other states, production will easily surpass the 150 million metric tons mark — 25 million up from last year. Less than one-quarter of the potential production, however, has been sold by producers so far, in the slowest farmer-selling progress since 2008/09, according to AgRural.… Continue reading

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Takeaways from the COP27 and implications to South American grain and cattle sectors

By Guil Signorini, Department of Horticulture and Crop Science, The Ohio State University

Between Nov. 6 and Nov. 20, world leaders gathered in Egypt for the 27th United Nations Climate Change Conference (COP27). Despite criticisms that became viral via social media regarding the large amounts of greenhouse gases (GHG) emitted by thousands of private jets flying to the conference, world leaders discussed and deliberated about environmental policies to manage global warming.

Inconsistencies aside, the COP27 showed a continuing and strengthening collaboration between public and private parties in a pragmatic route to accomplish the resolutions of the Paris agreement. The Paris Agreement is an international treaty signed in 2016 by 194 world leaders in which countries take on the responsibility to cap global warming at 1.5degrees C above pre-industrial average temperatures. Despite a large number of signatories, the Paris Agreement is not free of criticism, leading to the United States’ withdrawal in 2020.… Continue reading

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Tips to understand Brazil’s soybean production

By Daniele Siqueira, AgRural Commodities Agrícolas 

The record area of 43.2 million hectares that Brazil is likely to cultivate with soybeans in the 2022-23 crop was 91% planted by Dec. 1, compared with 94% in the same period last year and in line with the 5-year average, according to AgRural data. Production, based for now on trendline yields, is seen at 150.5 million metric tons, 25 million up from last season, when a severe drought linked to the phenomenon La Niña resulted in historical losses in southern states.

AgRural will replace trendlines by actual yield estimates by state later this month. So far, the new crop develops well, but rains have been spotty in some regions, and farmers in central states, including top producer Mato Grosso, are concerned about dry spots that are now heading into the pod-filling stage. Hit-and-miss rains have also been seen in southern states, but the situation is far from being as bad as the one faced a year ago.… Continue reading

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Skyrocketing input prices amid challenging weather conditions in South America

By Guil Signorini and Fabiano Colet, Department of Horticulture and Crop Science,The Ohio State University

The beginning of autumn marks the time of the year to turn our attention south and check the initial development of the growing season in Brazil and Argentina. At this time, South American growers are busy sowing their crops before spring takes place and brings rainfalls back. But before sowing, southern growers must have put a good effort into strategizing and circumventing challenges, especially in times of uncertainty. Their decisions and thought process may spark insights about North America’s upcoming ag input market landscape in five to six months.

The appropriate timing for planting has certainly been part of the thought process for Brazilian growers. The most logical driving factor in guiding growers’ decisions over planting date this season has been the high probability of La Niña. The National Oceanic and Atmospheric Administration (NOAA) agency projects a 79% probability of La Niña in the last quarter of 2022, with the probability dropping to 47% in January 2023.… Continue reading

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