Argentina is experiencing one of the worst droughts in the past two decades, driven by a third consecutive year of La Niña. The dry conditions threaten to set back planting of the country’s corn and soybean crops, and to damage the upcoming harvest of winter wheat.
Argentina’s weather woes, which come on top of drought conditions in the US and Europe and the ongoing war in Ukraine, add to concerns that the world’s 2022/23 crop cycle won’t be able to replenish depleted global supplies of many agricultural commodities. As a result, food prices are likely to remain elevated in much of the world, hurting consumers and squeezing profit margins for food manufacturing and merchandising companies.
Early season drought hampered sowing of Argentine winter wheat last May and harvested area is projected to drop about 7% from last year. During the key growing months of September and October, yields are expected to be hurt as soil moisture readings, weighted for area planted to wheat using the Gro Climate Risk Navigator for Agriculture, are at their lowest level since at least 2010. In addition, Gro’s vegetative health index for the country’s wheat crop is below the average of the past 20 years.
Argentina is the second-biggest wheat producer in the Southern Hemisphere, after Australia, and plays an outsize role in global supplies because its crop helps to fill a gap after Northern Hemisphere countries’ wheat has been sold. Argentina typically exports 12-13 million tonnes of wheat annually to Asia, North Africa, and other Latin American countries.
In Argentina’s main corn growing provinces of Buenos Aires, Cordoba, and Santa Fe, drought conditions have worsened over the past month, as can be seen in Gro’s Climate Risk Navigator, and are currently the third worst in two decades after 2008 and 2009, which were also La Niña years. As corn planting gets underway this month, Argentine farmers are contending with the lowest soil moisture levels since 2011.
Gro users can follow Argentina’s corn crop outlook using our Argentina Corn Monitor, which includes Gro’s Corn Yield Forecast Model, Drought Index readings, and Argentina Corn Balance Sheet. The machine-learning forecast model, which provides daily updates down to the district level, will go live when the crop becomes established around mid-December.
Argentina has rivaled Brazil as the world’s third-largest corn exporter, with shipments going mainly to Asian destinations.
Argentine soybeans, which are planted starting in November, could also be damaged if drought conditions persist. In each of the two previous La Niña years of 2020/21 and 2021/22, Argentina’s soybean production fell about 5% from the prior year, as can be seen on Gro’s Argentina Soybeans Monitor.