Drought Won’t Dampen Argentine Grain Production
By Mike Danna
Louisiana Farm Bureau Federation Public Relations Director
If there’s one thing Louisiana farmers know about, it’s drought.
Last year Louisiana farmers and ranchers lost more than $250 million in crop and livestock production to cracked soil and parched pastures. Weather is and always will be the dominant factor in the profitability of global agriculture.
Next week LSU AgLeadership Class 12 will see and hear firsthand how drought is impacting crops in Argentina. The South American country has been like a corralled racehorse, ready to break away and run headlong into the global agricultural trading arena. Currently the world’s third largest soybean-producing country behind the U.S. and top producer Brazil, Argentina is poised to flex its agricultural muscle.
But the 2012 growing season in Argentina is getting off to a very dry start. The La Nina weather pattern has brought significant heat and dry weather across much of the country. This week’s Bloomberg Businessweek report says the Argentine soybean crop could be short some four million tons, down from a projected 52 million tons to 48 million tons. Corn production there is also expected to take a big hit, with estimates calling for a one-third smaller crop this year than last year’s record crop of 30 million tons. Argentina is the world’s second largest exporter of corn.
But for a country with a 365-day growing season, it’s just another hiccup in an otherwise perpetual farm production cycle. Over the last 20 years South American countries like Brazil, Chile and especially Argentina have been diligently chipping away at U.S. global ag export dominance. The ag minister of Argentina, Orberto Yauhar, has said Argentina has its sights set on Brazil in an effort to become the world leader in soybean production.
That’s a bold statement given Brazil’s tremendous farmland acres in production. But nonetheless it shows that Argentina and its farmers know the value of the crops they produce. And even if it’s an “ag pep talk” with little to back it up, it means a country of just over one million square miles is ready to pound its chest, no matter how small its chest might be.
Class 12 member Neil Melancon, host of “This Week in Louisiana Agriculture’s” Bottom Line segment, keeps a close eye on South American grain production. In his weekly reports Neil will tell you that weather issues notwithstanding, Brazil, Argentina and Chile are the dominant players in global agriculture.
“We’re in their crosshairs,” Melancon said. “They want to beat us at every turn. This year the drought is impacting them, which is good for prices right now. But should things turn around, their grain production could explode. That’s going to affect U.S. farmers’ planting intentions this year. The smart grain farmer is always keeping his eye on South America.”