MercoPress. South Atlantic News Agency

Argentina could have to import beef and wheat in 2010

Argentina, once the breadbasket of the world and land of some of the best cattle beef could be forced next year to import wheat and beef to meet domestic demand, according to government and private sector reports.

An internal paper from the Agriculture Ministry Agro-food markets division points out that beef production in Argentina next year will fall from 3.11 million tons in 2009 to 2.67 million tons in 2010, which means, if forecasts are confirmed, that the country will have to import at least 1.000 tons to meet domestic demand.

This means that Argentina which only five decades ago was the world’s leading exporter of beef will have to appeal to foreign beef.

Argentina’s livestock has been traditionally in the range of 55 to 60 million head, however next year it is forecasted to drop to 47.9 million, which in practical terms means 438.000 tons less of beef.

As to wheat the current crop now beginning the sowing process, will have the smallest area in a hundred years and could turn Argentina into the world market as a net purchaser of the cereal, according to one of the country’s main grains and oilseed operators.

“The extreme climatic situation with a no-end-in-sight drought plus erred taxing policies have brought us to this situation”, said Cesar Gagliardo from Artegran.

In 2007/08, Argentina had a record crop of 16.3 million tons of wheat but for the coming season, 2009/10 will be below the 7 million tons threshold taking into account the area which is to be planted.

“From the 4.5 million hectares of 2007/08 we’re down to 3.7 million”, said Gustavo Lopez from Agritrend, making it the less planted season in the last century.

The powerful Argentine Rural Society is even more pessimistic, 3.5 million hectares which at an average yield of 2.000 kilos adds up to 7 million tons, just above the 6.5 million tons Argentina normally consumes.

However Gagliardo points out that “we shouldn’t discard a volume of 5 million tons, given the current climate and political situations”, and then Argentina will have to buy wheat in the open market.

A similar forecast was anticipated by Gustavo Grobocopatel, considered the Argentine “soy king”, who said it’s possible next year “we will have to import wheat from the US, Ukraine or Canada”.

Wheat has become the most sensitive of all cereals “because the government needs to ensure cheap, accessible prices, to keep inflation under control” but at the same time it’s of serious concern for surplus export because Argentina could loose its virtually “captive” next door neighbour client, Brazil.

In recent history, only in 1952 was Argentina forced to import wheat to meet domestic demand because of the wrong farm policies.

“Time is ticking: each day it does not rain the number of hectares to be planted comes down. We had no rainfall in March, April and only a million hectares are considered to have the needed soil humidity”, said Gagliardo.

Furthermore wheat is no longer an attractive crop and farmers are looking for other more lucrative options.

“Last year was a poor season for summer crops so there are not many funds for fertilizers, agro-chemicals and genetics” cautions Gagliardo.