MercoPress. South Atlantic News Agency

Uruguay's winter crops area jumps 49% to 593.000 ha.

Sowing wheat in a Uruguayan farm

Uruguay's winter crops area has increased 49% over a year ago totaling 593.000 hectares (399.000) according to the country's Agriculture Ministry Statistics Office, DIEA-MGAP.

Wheat is responsible for the main advance with the area sowed jumping 87% to 460.000 from 245.300 hectares last year. However barley for beer contracted 13% from 138.000 to 121.000 hectares. Regarding summer crops the data is less precise but the area is expected to increase 26% over the last season from 614.000 to 773.000 hectares planted this spring. All summer crops areas have increased with sorghum leading almost doubling the area with an additional 35.000 hectares. Sunflower will expand 70%, 24.000 hectares more and corn, 16% adding 13.000 hectares. The less dynamic is soy with an estimated increase of 8%, but still with the largest area since the one digit percentage represents 39.000 hectares. Winter and summer crops should cover 1.366.000 hectares, 35% over 2007. However since a second summer crop must also be included with the improved sowing techniques, the basic area is not as impressive. Last year second crops covered 44% of summer area, so the land dedicated to agriculture in the 2007/08 season was effectively 742.000 hectares. But for this 2008/09 season and assuming a similar area of second summer crops, net estimates should be in the range of 1.025.000 hectares, 38% over the net area of 2007/08. Nevertheless DIEA-MGAP statistics in spite of their rigorous methodology do not necessarily coincide with private estimates given the so called "confidence window" when there could be changes in crop planning intentions. A clear example is barley for making beer which according to the private sector in 2008 reached 145 to 155.000 hectares under contract from breweries. The number is significantly higher than the 121.000 of DIEA. Similarly with the last soybeans crop that officially was estimated in 773.000 tons but is considerably less than the 840.000 tons effectively reported as exported based on Uruguayan Customs numbers until August 2008. But said this and in spite of the expansion of the crops area, and farmers' enthusiasm, profit margins are becoming increasingly tight because of soaring input costs (fertilizers, fuel, seeds, agro-chemicals, etc.) and the weakening of commodity international prices. A situation that could worsen as the current financial crisis unravels and extends from the US to the world with slower global growth and a stronger US currency. For this coming summer crop, given current world circumstances and if the rainfall deficit can be managed, the equation remains positive.