:quality(85)//cloudfront-us-east-1.images.arcpublishing.com/infobae/57JMTZIVBCSFFENB6JP4XHVPJE.jpg "The impact of the drought: Farmers on the ground rate their current situation as the worst since 2018 1")
The moment that the agricultural sector is going through is not easy, plunged into economic and financial complications, and to which are added the effects of drought. All this was reflected in the latest survey by the Agrifood and Agribusiness Pole of the University of the Australs. In it, various negative values predominated, one of them was the drop in the producer confidence index, which stood last January at the lowest levels of the last 18 years.
The map showing the evolution of the drought: in January, the area affected by a “severe” lack of water increased
A report from the National Drought Watch Table has updated the areas hardest hit by the lack of rainfall. The impact on the main productive activities
The survey, of 406 producers with a gross value of production equal to or greater than USD 200,000, also showed the sector’s difficult time economically and financially, due to the impact of the drought on the agricultural campaign, and the prospects of producers in the short, medium and long term.
Last January, according to the survey, the trust incident of producers reached one of the lowest levels in its history, with a value of 68.59% less than in January 2022. This is a downward trend that began last May when ‘she reached 90 points, which despite the pessimism at the time was very close to the indifference values, which is 100 points.
Drought derivations: they investigate whether the recent death of livestock due to poisoning is due to the “7 de Oro” beetle or the “uriburu bug”
INTA Balcarce specialists cannot confirm a direct causal relationship between the death of the animals and the ingestion of the insect, while an entomologist who worked in the organization pointed the finger at the “meloidos”, protagonists of an “invasion” in San Justo nearly 70 years ago.
According to those responsible for carrying out the survey, the most notable loss was recorded in the current conditions indexwhere the value of 38 is the lowest of the whole series that started in October 2018 and similar to the values of 2020, where a series of political and institutional situations, such as the government’s intention to intervene and expropriate the ‘business vincenthad a very negative impact on the morale of the producers, since it was interpreted as another advance by the ruling party on private property.
On the other hand, although the future expectations index They present a slight improvement, from the point of view of producers for the next 12 months of improvements in climatic conditions and possible changes in the policies of the sector, all this is not enough to compensate for the sharp decline in the current situation. “There is a large deterioration in both components of the current conditions index (financial situation / time to invest), which have already materialized in the loss of income from the 2022/23 wheat campaign, to which are added the expected losses in maize and soybeans,” said specialists from the University of the Australs.
Due to the drought, new estimates are alarmed at the reduction in soybean exports
The Buenos Aires grain exchange predicted an 18% drop in export earnings and a 22% drop in tax receipts. In addition, soybean meal exports fell in January, Argentina’s main export product.
Additionally, they added data from the Strategic Guide for Agriculture of the Rosario Stock Exchange (Red Gea) with a downward adjustment of soybean production estimates to 34.5 million tonnes and corn production to 42.5 million tonnes. Regarding oilseeds, it is estimated that this will be the second weakest harvest in the last 15 years. For all this, the survey suggested that 86% of producers face unfavorable weather conditionsaffecting profitability and the flow of funds to cover costs.
in connection with financial situation index producers, the minimum values have been reached and with a year-on-year decline of 50%, as 72% of the producers surveyed said they were financially worse off than a year ago. All this can be explained by the sharp fall suffered by the last wheat harvest, a consequence of the drought and the late frosts. Total grain production was 11 million tonnes, compared to 24 million tonnes the previous season.
In addition to the decline in wheat production, the private report adds the almost irreversible damage to the first crops of soybeans and early corn, given an increasingly dramatic scenario of no rain. “This is having a huge negative impact on growers’ cash flow as the results of the wheat campaign have generated resources to fund the bountiful harvest and then wait for corn and soybean sales, allowing them to cancel commitments. taken and ultimately save soybeans as an instrument of capital preservation as a defense against runaway inflation,” they said from Austral University.
Finally, regarding the opportunity index making investments also showed a strong year-on-year decline in the first month of this year: the value was 41, down 60% from January 2022, when it stood at 41. 119 (above 100%). time in its history).
In this regard, the investigation revealed that 79% of growers said now is a bad time to invest in fixed assets/cattle farm. “In January 2022, many producers thought it was a good time to invest, mainly to invest the financial surpluses of the wheat campaign, with reasonable expected returns from corn and soybeans, negative bank interest rates ( below expected inflation) and the ability to access machinery at the official dollar,” the book concludes.
Continue reading: