MercoPress. South Atlantic News Agency

Agro News

Headlines:
Good prospects for sheep farming; Farm debts; Optimism in Palermo;

Good prospects for sheep farming

A strong recovery of the sheep farming sector seems to be in the making in Uruguay. Farmers and traders are encouraged by international bullish prices for wool, mutton and lamb which coincide with Uruguay's record low flock in a century, just above eleven million head of sheep. "There are great expectations among farmers regarding the coming wool clip 2002/03, since it's estimated it won't even match the local textile industry demand. This means prices will be very strong", said Romualdo Rodríguez, a local wool and cattle trader. Mr. Rodríguez added that the best prices will become effective in the second half of next January, and he fears that "many cash strapped farmers might be forced to sell before". "We know quiet a few farmers in the north of the country want to return to sheep farming, giving the good prospects, but there's an additional bottle neck and that is that there are not enough ewes. So those who held to their sheep have a few good years ahead", underlined Mr. Rodríguez. Lamb breeding should also have an upturn because "Uruguay has managed several market niches overseas for its organic exports and there are several programs promoting early, heavy lambs", concluded Mr. Rodríguez. Uruguay's flock is almost 80% double purpose Corriedale, (22-28 micras) with the rest mostly Merino and Merylin crosses.

Farm debts

Although the recent Uruguayan banking situation with a 50% depreciation of the local currency should come as a strong boost for the country's agriculture exports, (beef, wool, hides, cereals), not all farmers are posed to take advantage. According to Uruguayan farmers associations and the banks, Camp has an overall 1,2 billion US dollars debt and many individual farmers are unable to pay back, unless they are generously re scheduled. Besides, as a direct consequence of the banking crisis, three of the four banks that have momentarily ceased operations are closely linked to camp activities particularly livestock sales, and therefore farmers face a serious liquidity shortage. The situation not only threatens the whole payments system in the Camp but has also more than doubled retail beef prices in Uruguay. Uruguayan government banks traditionally have had a special consideration for farming debts, but this time the Unites States Treasury sponsored, International Monetary Fund 3,8 billion US dollars bail out program includes several drastic conditions. No further financial assistance to beleaguered banks, even if it means their definitive closure, and the strict collection and/or execution of all debts standing. "The farming sector must honour its debts otherwise we will have to sell the farms, if necessary. Unfortunately, but finally it boils down to a change of proprietor", said a reliable bank source. Banking officials point out that a restructuring debt program for farmers with debts of up to 250,000 US dollars already has been implemented involving US or Uruguayan Treasury bonds, "however some of the big debtors are constantly pressing hoping for come kind of forgiveness, and this is not possible". Daniel Cairo, president of Uruguay's main government bank, Banco República, recently revealed before a Congressional committee that approximately forty farmers, "with good solicitor counselling have, during the last two decades, avoided honouring an overall debt of over 200 million US dollars that dates back to 1982, when the previous banking crisis". "You can imagine where those original 200 million US dollars stand now; we can't afford any thing similar to happen this time", stressed Mr. Cairo.

Optimism in Palermo

Argentina's top agriculture show in Palermo, Buenos Aires, ended last weekend in an optimistic mood with encouraging prices for some of the winning livestock and much interest for agricultural machinery, according to reports in the local press. The116th. Edition of the Palermo Rural show will be remembered as a turning point for Argentine farmers hopes particularly since the country's financial crisis has boosted agriculture exports and income, both for the farming sector and for a government desperately short of foreign currency. Over half of Argentina's exports are agriculture commodities, and a floating currency has meant farm prices have more than doubled in six months spurring prospects of a strong recovery both for livestock and agriculture. In pesos the price of live cattle jumped from 78/80 cents to 1,98/2,00 pesos. With this in mind one of the best bulls of the Palermo Show, a two years Polled Hereford was sold in 70,000 Argentine pesos, equivalent to 19,600 US dollars. "This is an excellent price if we take into account all that has happened in this country in the last few months. Dollar value it's not surprising even compared to a year ago, or much less to 1994, when the best bull reached 60,000 US dollars. But nobody in Argentina talks anymore of US dollars and the level of prices in Palermo this year overall was 50% above expectations", indicated Juan Bullo, president of Argentina's Hereford Breeders Association. Mr. Bullo pointed out the Polled Hereford bull and most other calves and females that were auctioned at more than satisfactory prices were "pure Argentine genetics". Mr. Juan Manuel Garciarena, owner of the farm where the successful winning livestock was bred said that "we already have farmers from Brazil and Paraguay interested in our strain". However Enrique Crotto, president of the powerful Argentine Rural Society organizer of the Palermo Show during the inaugural ceremony made some cautious remarks. "We're happy things have improved for the Camp, but if the country overall doesn't pick up soon, the recovery won't be long lasting", remarked Mr. Crotto. Confirming Mr. Crotto's doubts there was no official government speech this year: the Agriculture Secretary representative did not show up fearing farmers anger: that same week the cash strapped government imposed a tax on farm exports.