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March 25, 2020

Argentina Farmers under Dark Cloud as Harvest gets Underway

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Farmers in Argentina are starting to harvest their 2019/20 crops under a dark cloud of uncertainty. The yield prospects of their soybean and corn crops are uncertain due to a hot and dry end to the growing season, the export taxes on soybeans were increased to 33% earlier this year, and the spread of the coronavirus is putting in doubt the country's ability to transport and export the grain in a timely fashion.

Hot and dry conditions during early March negatively impacted the early planted soybeans just as the crop was in the critical pod filling phase. Recent rains came too late to help the earlier planted soybeans, but they could still help the later planted soybeans. Farmers are just barely getting started on their soybean harvest.

Farmers had already harvested about 14% of their corn as of late last week. The corn that is being harvested was the earliest planted corn that had completed most of its growth cycle before the dry weather in early March. There is a lot of variability in the early corn yields, but the eventual corn yields won't be confirmed until the harvest proceeds further. The later planted corn in Argentina is currently pollinating, so it will need additional rainfall going forward.

Adding to the uncertainty is the spread of the coronavirus and the recent presidential decree curtailing the movement of the population and the closing all non-essential business. The Argentine government assured the farmers that the production, processing, distribution, commercialization, and export of agricultural products would proceed as normal.

The government may decree that everything will proceed as normal, but individual cities and workers may not follow suit. Last week, the mayor of the city of Timbues ordered the closure of five grain terminals, but he was eventually overruled by the governor of Santa Fe province.

Approximately 70 cities in the Pampas Region are prohibiting farmers from filling their trucks with fuel in their city in order to slow the spread of the virus. These trucks are the principal way in which grain is transported to processors and exporters. Agribusinesses all across the country have adopted the government's guidelines in order to protect their employees from the virus and insuring that there is no disruptions of their operations.