Argentine Wheat On The Downfall

Argentina has been one of the main grain producers of the world, and its wheat has been exported to many destinations in various continents. However, the 2009-10 wheat campaign ended in January with a drop of about 15 per cent compared to last year. Also, the cultivated surface for wheat was the lowest in a century, according to an official report from Argentina’s National Institute of Agropecuary Technology (INTA.) Unfavourable weather conditions and social unrest among the farmers, in relation to the authorities’ restrictions for wheat exports, are the main causes of this drop in production.

In spite of Argentina’s favour-able conditions for wheat growing, for the 2009-10 campaign only 2,759,580 hectares (6.9 million acres) were planted, which is 10.4 per cent less than the Buenos Aires Cereal Stock Exchange initially projected. And the harvest yielded 7.44 million tonnes of wheat, according to the same source. This left a small portion available for export, given that “Argentina’s internal demand for wheat is about six million tonnes a year,” says César Gagliardo, president of the Argentine cereal trader agency Artegran. This is a significant drop in export potential. For instance, the country exported 13.5 million tonnes of wheat in 2004-05, according to the United States Department of Agriculture (USDA.)

This bad performance could be explained, in part, by the extreme drought Argentina has been going through since 2009. “Wheat in Argentine soil needs a minimum of 300mm (12 inches) of water to produce good quality,” says Gagliardo. The drought was not general, however. The wheat-growing region in Argentina is vast, and in some regions in the Buenos Aires province, producers experienced the opposite problem: the crop was damaged due to excess of rains. This water reduced the seed weight, dropping it below the standards demanded by the local millers.

GOVERNMENT MEDDLING

To keep more grain at home, the Argentine government set export quotas. “Unfortunately, the government’s intervention in this market has intermittently suspended the possibility to export wheat for prolonged periods and this has discouraged producers from seeding this grain”, says José Peloni, president of the Argentine Postharvest Association (APOSGRAN.)

“The Government is permanently creating new rules for the sector, which vary from export prohibitions to fixed quotas, etc. All of these changes are immersed in a context of promises for the sector that are usually not kept,” says engineer and agriculture specialist, Alberto Hack. He added: “Every policy applied correctly has its contradiction: the last two wheat harvests turned out to be half of the average wheat production in the last decades.”

With regards to exports, Brazil has traditionally been the main destination for Argentine wheat. “Argentina managed to export up to five million tonnes of wheat to Brazil,” says Peloni. The rest of the MERCOSUR (Paraguay, Uruguay, Bolivia and Chile) as well as Peru, Colombia, Egypt, Algeria, Morocco, Saudi Arabia and Iran are other frequent destinations.

However, exporting Argentine wheat has become quite a difficult task due to government regulations and export taxes, which are 23 per cent of the FOB price. Also, the state controls wheat exports, granting special permits to the exporters. “Permits are quite limited these days, and this prevents active exportation in a demanding market. As a consequence, the dynamic of free offer and demand disappears. It also disturbs free competition between the different sectors that compound the demand, leaving only the millers as the buyers of the production throughout the year,” says Peloni.

ARGENTINA’S WHEAT GROWERS

According to the Argentinean Secretary of Agriculture, Livestock, Fishing and Food (SAGPyA) there are 29,500 wheat producers in Argentina, of which 27,000 are small and medium size; 800 are medium-large producers, and 1,700 producers — 5.7 per cent — are large companies that account for 50 per cent of the total production.

Argentina has many advantages for growing wheat. “The Southern and Southwest areas of the Buenos Aires province have all the necessary elements to obtain very high yields under appropriate weather conditions. In the Salado basin for instance, in the 2009-10 harvest, producers obtained yields of up to seven tonnes per hectare,” says Peloni. (That’s 104 bushels per acre based on 36.7 bushels per tonne.) Overall averages are between 3.5 and 4.5 tonnes per hectare (50 to 65 bushels per acre, roughly) under good growing conditions, he says.

The soil composition and the warm and temperate weather during the development of the crop are ideal for the correct growth and maturation of this cereal. “Wheat adapts well to the soil in the Crdoba and Santa Fe provinces, which have predominantly high level of mollisols, and in the Entre Ros province, where the ground is clayey with vertisols,” says Peloni.

“However, it has to be stressed that in some areas there are increasing needs for nutrient application, given the decrease of these elements due to the amount of crops planted along the years and less crop rotation,” Hack adds. “For this reason, there’s a demand for fertilizers for sustainable agriculture.”

“In Argentina the most common wheat is the red hard winter kind. There are very few plantations of red soft winter, durum or coarse wheat,” Peloni says. “And in the last years there has been another form of French wheat introduced, known as Baguette, which is a soft grain that in the Buenos Aires province has obtained very good yields.” (Coarse wheat, Triticum aestivum, is used for animal feed.)

The main wheat producing areas in Argentina are located in the centre and northeast, mainly in the provinces of Buenos Aires, Crdoba, Entre Ros, Santa Fe, San Luis, Santiago del Estero, Chaco, Formosa, Salta and Tucumn.

SEEDING AND HARVESTING TECHNIQUES

The seeding period for wheat goes from April to September, and the harvest takes place from October to January in Argentina. “Approximately 80 per cent of Argentina’s wheat crops are planted using the direct seeding method,” says Gagliardo.

“Seeding machines used in Argentina are specially designed for

the no-tillage seeding system. Soil fertilization is done by the seeding machine itself at the same time,” Peloni says. This is a phosphorus fertilizer, applied at rates of 50 to 80 kg per hectare (roughly 50 to 80 pounds per acre.) And then during the maturation and tilling of the crop, doses of 100 and 150 kg per hectare of urea are applied, he says.

Combining starts when seed moisture reaches 12 to 14 per cent at a seed temperature of 30 to 35C, Peloni says. Harvest commences at the end of November in the areas of Entre Ros, Crdoba, Santa Fe, the North of the Buenos Aires province and Tucumn. At the end of October and the beginning of November, it happens in the centre and South of Buenos Aires. Finally, in La Pampa province, harvest takes place from the end of December and during January. Harvest temperatures are usually high in all the wheat producing areas since it is in the middle of the summer. “This contributes to the quick drying of the grain in the plant,” says Peloni.

Hack stressed the fact that, “in Argentina, although there are some imported machines, there are a large number of combine harvesters that were manufactured nationally.” Peloni adds that “high-end technology has been used in Argentine fields since local producers effected an important technological conversion at the beginning of this decade. These machines usually posses satellite technology that allows a mapping of the harvested surface and they inform about the yield, the grain’s humidity levels, etc.”

STORAGE AND TRANSPORT

Most of the harvest is deposited in silos owned by cooperatives. Hot and moist grain is cooled by injecting air through ventilators. “Only about 28 to 30 per cent of the harvest is stocked on the fields since producers in Argentina don’t own silos. This is usually the grain reserved for seed, for their own use,” Hack says.

“Cooperatives receive the primary production and stock it and condition it, before arranging sales to exporters and industrial producers,” Peloni says. “Millers in Argentina don’t usually buy large amounts of wheat at a time since they don’t have much storage capacity.”

There is a wide commercial network of grain buyers across the country. Producers sell wheat for cash or set a price in the futures market. Another method getting more popular is to guarantee delivery of the wheat if the producer buys inputs from the cooperative, Hack says.

With regards to transportation, about 90 per cent of the wheat production is moved to the ports by truck. “However transport by train is increasing year after year,” Hack says. “The producers pay for the trucks every time they need one during the harvest or to take the production to the storage centre. The stocking company or cooperative usually pays to transport wheat to the docks or mills, although the cost is deducted from the purchase they make from the producer, and therefore it is he who ends up paying for the transport,” says Peloni.

CROP PROTECTION

“The main agrochemical used in wheat crops in Argentina is glyphosate,” says Gagliardo. In general, crop protection products are applied previously to the seeding period, between May and July. “Glyphosate is applied at three litres per hectare added to six or seven grams of Metsulfuron per hectare. But in the following months herbicides are not necessary since the winter contributes to keep the field free of weeds,” Peloni says.

Fungicide application is done in the final months of maturation, generally between September and October. These control fungicide diseases at the end of the cycle, when the weather is usually humid and rainy. “Fungicides such as azovistrobina cyproconazole are applied in 400 ml per hectare. Argentine farmers also use imidacloprid against the white worm (Diloboderus abderus) and plant louses. They can also treat seed with tebuconazole before seeding,” Peloni says.

Insecticides are applied with self-propelled, pull-type or airplane “fumigators.” However “the main plagues were seen in the past and practically are not seen any more in Argentine fields due to the new work techniques and advanced technical products,” Peloni says.

Cristina Kroll is a freelance writer based in Buenos Aires

the no-tillage seeding system. Soil fertilization is done by the seeding machine itself at the same time,” Peloni says. This is a phosphorus fertilizer, applied at rates of 50 to 80 kg per hectare (roughly 50 to 80 pounds per acre.) And then during the maturation and tilling of the crop, doses of 100 and 150 kg per hectare of urea are applied, he says.

Combining starts when seed moisture reaches 12 to 14 per cent at a seed temperature of 30 to 35C, Peloni says. Harvest commences at the end of November in the areas of Entre Ros, Crdoba, Santa Fe, the North of the Buenos Aires province and Tucumn. At the end of October and the beginning of November, it happens in the centre and South of Buenos Aires. Finally, in La Pampa province, harvest takes place from the end of December and during January. Harvest temperatures are usually high in all the wheat producing areas since it is in the middle of the summer. “This contributes to the quick drying of the grain in the plant,” says Peloni.

Hack stressed the fact that, “in Argentina, although there are some imported machines, there are a large number of combine harvesters that were manufactured nationally.” Peloni adds that “high-end technology has been used in Argentine fields since local producers effected an important technological conversion at the beginning of this decade. These machines usually posses satellite technology that allows a mapping of the harvested surface and they inform about the yield, the grain’s humidity levels, etc.”

STORAGE AND TRANSPORT

Most of the harvest is deposited in silos owned by cooperatives. Hot and moist grain is cooled by injecting air through ventilators. “Only about 28 to 30 per cent of the harvest is stocked on the fields since producers in Argentina don’t own silos. This is usually the grain reserved for seed, for their own use,” Hack says.

“Cooperatives receive the primary production and stock it and condition it, before arranging sales to exporters and industrial producers,” Peloni says. “Millers in Argentina don’t usually buy large amounts of wheat at a time since they don’t have much storage capacity.”

There is a wide commercial network of grain buyers across the country. Producers sell wheat for cash or set a price in the futures market. Another method getting more popular is to guarantee delivery of the wheat if the producer buys inputs from the cooperative, Hack says.

With regards to transportation, about 90 per cent of the wheat production is moved to the ports by truck. “However transport by train is increasing year after year,” Hack says. “The producers pay for the trucks every time they need one during the harvest or to take the production to the storage centre. The stocking company or cooperative usually pays to transport wheat to the docks or mills, although the cost is deducted from the purchase they make from the producer, and therefore it is he who ends up paying for the transport,” says Peloni.

CROP PROTECTION

“The main agrochemical used in wheat crops in Argentina is glyphosate,” says Gagliardo. In general, crop protection products are applied previously to the seeding period, between May and July. “Glyphosate is applied at three litres per hectare added to six or seven grams of Metsulfuron per hectare. But in the following months herbicides are not necessary since the winter contributes to keep the field free of weeds,” Peloni says.

Fungicide application is done in the final months of maturation, generally between September and October. These control fungicide diseases at the end of the cycle, when the weather is usually humid and rainy. “Fungicides such as azovistrobina cyproconazole are applied in 400 ml per hectare. Argentine farmers also use imidacloprid against the white worm (Diloboderus abderus) and plant louses. They can also treat seed with tebuconazole before seeding,” Peloni says.

Insecticides are applied with self-propelled, pull-type or airplane “fumigators.” However “the main plagues were seen in the past and practically are not seen any more in Argentine fields due to the new work techniques and advanced technical products,” Peloni says.

Cristina Kroll is a freelance writer based in Buenos Aires

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