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January 5, 2012

Dry Weather Continues to take Toll on South American Crops

Crop losses in Argentina and southern Brazil continue to mount as hot and dry weather continues to impact the corn and soybean crops in the region. Parts of central Argentina have recording some of the driest weather in over a century and one of the hardest hit areas of Argentina appears to be northwestern Buenos Aires, southern Santa Fe, and southern Cordoba. Unfortunately, this area contains some of the most productive farmland in the country.

Thus far, it's the corn crop that has taken the brunt of the impact from the hot and dry weather. The majority of the corn in Argentina either pollinated during the month of December or will pollinate over the next few weeks. Pollination will certainly be negatively impacted by the adverse weather and estimates are that 15% to 20% of the corn yield potential has already been lost.

There are also three quarters of a million hectares of corn that was not planted in Argentina and the planting window for the corn will start to close in about 10 days. Without significant rainfall before the middle of January, it is entirely possible that the corn harvested acreage in Argentina will be significantly below initial estimates at the start of the growing season.

The soybeans in Argentina are flowering and starting to set pods, so they have not reached their critical reproductive phase as yet. The crop could still recuperate if it received good widespread rains with the next two weeks. Barring a significant rainfall event, the soybean yield potential will start to decline each week that remains dry. If the temperatures return to elevated levels as they are forecasted to do, the soybean yield potential could start to decline even sooner.

Additionally, there are still 3.5 million hectares of soybeans that have not been planted in Argentina. Most of those soybeans are double crop soybeans planted after the wheat is harvested. Even though the wheat harvest is nearly complete, farmers are waiting for additional moisture before they risk planting their double crop soybeans. The planting window for double crop soybeans in Argentina will stay open a little longer than it does for corn, but planting of the double crop soybeans is already late and without significant rainfall within the next three weeks, it is possible that the Argentine soybean acreage will also be less than what was estimated at the start of the growing season.

In Brazil, the hardest hit areas are in the three most southern states of Rio Grande do Sul, Santa Catarina, and Parana. In the driest areas, some fields have only received a few light and scattered showers since September when the summer crops were planted and no rain whatsoever for the last month and a half. The temperatures in southern Brazil have not been as elevated as they have been in Argentina, but the dryness has taken its toll nevertheless.

The corn crop in Brazil has been the most impacted by the dry weather since it pollinated under very adverse conditions. Losses in the full-season corn crop will depend on the stage of development when the dry weather hit and if the crop was fortunate to receive a few light showers at critical times. As a result, the yield variability will be very high in southern Brazil this growing season. In Rio Grande do Sul for example, corn grown in the eastern part of the state could still achieve yields in the range of 140 bu/ac, whereas in the western part of the state where the rainfall has been very sparse, some fields will have zero yield because the crop is being cut for animal feed instead of grain production.

The soybeans in Rio Grande do Sul are just starting to flower and set pods, but the dry weather is taking a toll on the small soybeans as well. The dry weather has stunted their growth and imperiling the crop's yield potential.

Further north in the state of Parana, the situation is critical as well. Agronomists are estimating that losses for the full-season corn crop in the western part of the state could be as high as 40%. Any rainfall received in the near future could still help the soybean crop, but losses in the corn crop are irreversible.

In all three southern states, many municipalities have declared states of emergency and local government agencies are trucking water to rural areas for human and livestock consumption. Unfortunately there does not appear to be any significant relief in the near term forecast.