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Market Report, "Argentina Agribusiness Report Q3 2013", Published

Fast Market Research recommends "Argentina Agribusiness Report Q3 2013" from Business Monitor International, now available

 

Boston, MA -- (SBWIRE) -- 08/06/2013 -- Despite significant downgrades to wheat production, it appears that the 2012/13 Argentine grain crop will come in above average, largely due to improvements in soybean and corn production. We expect wheat to show the most production growth over the long term, although this will largely be a function of base effects. We believe country's livestock sector will improve in 2012/13, as lower grain prices and larger cattle herds are likely to spur beef production. Over the long term, we expect the poultry sector to show the largest growth owing to domestic and international demand. As ever, the key risk for the sector will be government involvement. With a potential peso devaluation coming in Argentina, and an election in October, the sector could be in for a turbulent year despite a general improvement in the sector's prospects.

Key Trends

- Corn production growth to 2016/17: 23% to 30.7mn tonnes. We expect the area harvested to expand as improved prices and export opportunities arising from increasing livestock and biofuel production encourage farmers to plant corn. However, some of this growth will also be due to base effects.
- Soybean production growth to 2016/17: 6% to 54.1mn tonnes. This is mainly due to recent government approval for new types of genetically modified seeds, which are likely to boost yields over the medium term.
- Beef production growth to 2016/17: 18% to 3.3mn tonnes. Despite the growth, beef production will fail to exceed levels seen in the mid-2000s.
- 2013 real GDP growth: 3.7% year-on-year (y-o-y) (down from 4.0% in 2012; predicted to average 4.2% from 2013 until 2017).
- Consumer price index (end of period): 22% y-o-y in 2013 (down from 25% in 2012).

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Industry Developments

We have revised down our forecast for 2012/13 Argentine corn production from 27mn tonnes to 25mn tonnes. As of late April, 35% of the crop has been harvested, and there are concerns over low yields, particularly in the north east and Entre Rios. These two areas provide sizable output depending on the season. In some north-west areas, dry weather has reduced yields by more than half, while one-fifth of the corn planted was lost. So far, the key growing areas for the corn crop, which include the central region of Argentina (particularly Buenos Aires province and Cordoba), appear to be spared in terms of the dry weather. The corn harvest is likely to be finished around June.

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