After drought devastated Argentina’s 2022/23 corn and soybean crops, continuing dry conditions threaten to set back planting of the country’s 2023/24 winter wheat crop.
Argentina is the second-biggest wheat producer and exporter 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.
In addition, US dollar-denominated agricultural exports are vital to Argentina’s economy to service international debt and pay for imported products, the price of which has increased as the peso has weakened. Food prices in Argentina have soared more than 450% since the start of 2020, according to Gro’s Agricultural Price Inflation Application.
Drought readings in Argentina’s main wheat growing provinces are at their second-highest level in nearly 20 years, as seen in this Gro Drought Index display, weighted for area planted to wheat using Gro’s Climate Risk Navigator for Agriculture. Similarly dry growing conditions last year slashed Argentina’s wheat yields by 33% year over year, and production dropped 43%.
Another disappointing wheat harvest in Argentina could further weigh on the world’s wheat supplies. Global wheat inventories this year, excluding China, are forecast to decline for a fourth year in a row to the lowest level in 15 years. Argentina typically exports 12-13 million tonnes of wheat annually to Asia, North Africa, and other Latin American countries, representing about 6% of total wheat exported worldwide.
It is still early in Argentina’s wheat growing season, and a forecasted transition to El Niño climate conditions could bring increased precipitation to the country’s wheat regions. Gro users can monitor the crop’s progress via Gro’s Climate Risk Navigator for Agriculture, which can be weighted for Argentina’s wheat growing regions, showing metrics for temperature, precipitation, vegetative health, drought, soil moisture, and more.
Australia, which is also currently planting wheat, could see an end to a series of three consecutive bumper crops, following the departure of La Niña and the expected onset of El Niño, which typically brings drier weather to the country’s wheat regions, especially in the east. Gro’s machine-learning Australia Wheat Yield Forecast Model will begin providing daily updated forecasts at the province level once the crop becomes established.