In the last few days the Argentine news media has been focusing on the fact that there does not seem to be enough wheat or corn to go around, which is driving prices higher and causing concern for the users of these grains. This is particularly true for bakeries which have been forced to charge soaring prices for bread.
Wheat prices have shot up for new harvest wheat, which is not looking good due to weather issues. The mills are fighting each other for the wheat and so the Argentine wheat prices are among the highest in the world. The new Argentine harvest, which starts in November has seen prices balloon to 500 dollars per ton for immediate delivery, while in Chicago the price is 250 a ton.
There was a bad 2012/2013 harvest and the new harvest is delayed due to drought and early freezes. This means there is very little wheat left for the users, and therefore the fierce competition in getting supplied.
The Bolsa de Cereales de Buenos Aires estimates that the new harvest will reach 10.35 million tons. The previous harvest was barely 8.2 million tons. Argentina consumes around 6.5 million tons of wheat annually.
On the corn side, the problem has to do with the “reported” harvest numbers and the “real” harvest numbers. For the 2012/2013 cycle, the Ministry of Agriculture reported 32.1 million tons. The Interior Commerce secretary reported 30.3 million tons. And private estimates put the harvest at between 26 and 28 million tons.
Some of the number variations have to do with crop yield estimates. The official government numbers report a yield of 9.5 tons per hectare, while private estimates say the average was more likely 7.6 tons per hectare.
Whatever the true harvest numbers, the reality is that corn users are hard pressed to get their hands on what they need. According to farmers organizations the corn available amounts to1.63 million tons. With a monthly usage of 660,000 tons, that would mean there are only two and half months of corn supplies left.
The Argentine Chamber of Feedlots said that corn is quite difficult to get. Poultry producers say that they are also having trouble getting corn, but place the blame on the exporters.
For its part, Maizar, the Argentine Corn and Soy Association, says there is no shortage of corn and it is impossible that Argentine would be left without corn. Maizar indicates that Argentina had a bountiful harvest and that 30.3 million tons is the real number.