ARGENTINA.
DROUGHT PROBLEMS.
Farmers are now desperate for heavy rains as the forecast rains for the weekend, never came to the pampa of Argentina.
This unprecedented dry spell is proving to be an explosive cocktail, with the farmers already baying for the blood of the government.
Farmers are now talking of boycotts on the sale of grain and beef to begin in earnest if February, this will spell disaster for the government of Argentina.
Without immediate rain, the soy crop could be under 40 million tons and not the forecast 52 million tons.
There could be 30 % cut back in sowing that in now taking place for the winter crops, and the wheat production could be as low as 8.8 million tons and not the forecast 16.5 million tons.
Corn could be 14 million tons and not the forecast 22 million tons, while sun-seed could also drop to 3 million tons from projected 4.7 million tons.
There have been large drops in the cattle herd, in the province of Santa Fe, a large beef producing area, the cattle herd is back by 25%, as cattle have been lost in the drought or gone to the meat plants.
To replace these cattle numbers is going to take 10 years, and Argentina will slip down the table of important beef exporters in the world.
For the first 80 years of the last century, Argentina was the main beef exporter in the world, while the infrastructure is still in place, the heart has been cut out of the beef industry.
In the last three years Argentina has dropped from number three to number five, on the world stage of important beef exporters, and without rain she is going to lose her place in the top ten most important beef exporters.
Areas sown for wheat will drop from 6 million hectare to 4 million, corn will drop form 3.2 million hectares to 2.4 million hectares and sunflower will be 2.1 million hectare from 3.4 million.
Estimate suggest that over half a million breeding cows and heifers, have gone for slaughter since October.
The image of the president has fallen sharply since the dispute with the farmers began in March of 2008, then Argentina was enjoying bumper harvest and world record price of commodities, this year the harvest is in trouble and prices on the commodity market have dropped 50%.
The beef industry has no buyers the prices in Europe outside of the Hilton cannot be met, the Russians have no money to pay for meat, the lucrative markets in the Middle East are locked up by the Australians, who are now very competitive on the low dollar rates in Australia.
Argentina has to export in US dollars, the last remnants of previous dictatorships that were propped up by the United States.
So all in all the picture is very bleak, the weather is in the hands of God, while the politics in the hands of those who are acting like god.
