World Grain - August 2014 - 38

REGIONAL REVIEW: A VITAL GRAIN PRODUCER

Ascension Cooperative's grain storage facility with 28,300 tonnes of capacity in Ascension, Buenos
Aires, Argentina. Photo courtesy of Global Industries.

with good yields and quality; extremely
high prices in the previous season (although nobody can expect such values, farmers have expectations prices
will be good); good projected returns;
in crop MY2013-14 wheat combined
with second crop soybeans resulted in
many cases the best economic alternative; the need of many farmers to have
money at the end of the year to finance
summer crops plantings; in most cases
there are excellent levels of soil moisture which would guarantee a very good
start; plenty availability of good quality
seed; a drop in barley area which would
be taken over by wheat; and the need
of increased rotations due to the ever
growing soybean area."
For barley, the attaché in Buenos
Aires reported a consensus that area will
drop in 2014-15.
"We estimate area at 950,000 hectares,
a 24% decrease," it said. "Production is
projected at 3.3 million tonnes. Barley
area grew significantly in the past few
seasons, primarily as an alternative for
farmers to 'run away' from planting
wheat which was, and continues to be,
38

closely controlled by the government
(making the price for the farmer lower
than it should be).
"Before this shift began (MY200809), the area ranged between 500,000700,000 hectares. In the past two crop
seasons, many barley producers were
disappointed with the quality and yields
obtained. Many wheat producers who
began to plant barley as an alternative
had difficulties mastering the crop.
Furthermore, the price of barley has
fallen significantly from its parity with
wheat, making wheat significantly more
profitable (current price differential is
+$25-35 per tonne)."
From Brasilia, attaché reports have
covered increasing ideas on Brazil's crop.
"2014-15 wheat production is increased to 6.3 million tonnes due to
increased area in the tropical savannah
("cerrado") biome," a report dated June
27 said, pointing out that the government is encouraging expansion into that
area. "The 2013-14 corn production is
up from the previous estimate to 76 million tonnes on extended rains and better
than expected yields.

"The states in the "cerrado" biome of
the Center-West are expected to see a
17% increase in area from the previous
year, though the area is still small in comparison to the main growing regions of the
South and Southeast. Recent flooding and
wet weather in the states of Rio Grande
do Sul and Santa Catarina has slowed the
planting process, which will delay the harvest into October/November."
The attache in Santiago stressed the
political importance of wheat in an annual report on the market there. "There
are an estimated 46,000 producers, of
which 87% plant less than 50 hectares
and produce 22% of the total output
of wheat; just over 40,000 are small
farmers which are the so-called subsistence group with little or no alternative
crops," the report said. "A little over 550
farmers produce 50% of the wheat in
Chile and around 5,000 are considered
the medium-size producers."
The attache in the Colombian capital Bogota reported the success of U.S.
exporters there. "U.S. corn exports to
Colombia are swiftly recovering the market against Southern Common Market
(MERCOSUR) competitors," a report
said recently. "As of March 31, 2014, U.S.
corn exports reached 1.7 million tonnes, or
about 74% of the 2.3- million-tonne quota
for 2014. The entire quota will likely be
filled before August this year."
Venezuela is reliant on imports.
"Overall grain production continues to
be held back due to control policies and
insufficient agricultural inputs," the attache in Caracas said. "This factor, combined with growing internal demand,
has led to shortages on the local market, and therefore, trade opportunities.
We expect imports of yellow corn, rice,
and wheat to continue strong, based on
domestic food demand, requirements of
the animal feed industry, and a fall in
domestic grain production."
Chris Lyddon is World Grain's European editor. He
may be contacted at: chris.lyddon@ntlworld.com.
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World Grain - August 2014

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