Farmland Uruguay Market Update April 2019

Monthly market update providing objective information about crops, cattle, forestry and other diverse farming business in Uruguay.

Climate

Weather conditions in late summer were quite favorable with frequent rainfall, but not in abundant quantities. Temperatures were moderate. All in all, grains and pastures have seen very good grow conditions. Forecast for Autumn shows rainfall slightly above average which may complicate harvest of grains in May.

Cattle

The World Congress Aberdeen Angus was held in Uruguay from March 18 to 29, 2019. During the first week field trip were made to several breeders throughout the country. The second week a conference was organized and several competitions and auctions were carried out in Punta del Este. Visitors arrived from many different countries. Genetics used in Uruguay was very well reviewed.

Milk production in February was the lowest in 8 years and 23% less than in January. One reason is that dairy farmers gave their cows grass rather than grains for reasons of price and the fact that there was so much grass available. A second reason was the eruption of mastitis at several dairy farms. And finally two heat waves in February also caused a decreasing milk production. The expectation is that milk production will rise in May when many new calves will be born. In general dairy sector in Uruguay continues struggling.

In February a shipment with 8.895 steers was exported to Turkey. In April a new shipment with 25.000 steers will follow.

Crop

After a very good harvest of corn, traders are working hard on exporting this corn from Uruguay. Uruguay is not normally an important exporter of corn. However, yields were so good that this year there is over supply of this grain. A first shipment is organized for 17.000 tons at 158 USD per ton FOB. This price is a lot lower than a year ago when 210 USD per ton was paid on domestic markets.

In Winter there will be more planting of barley and carinata which is another oilseed crop for renewable oil and also cover crop. Pulp mill UPM will double the arable area of carinata up to 20.000 hectares. Beer producer Malteria Uruguay intends to plant a similar as last year, 107.000 hectares, with barley. A small increase in wheat production is expected.

Record yields are expected in soy beans. Given the low prices for soy beans at local markets (310 USD approx.), there is now very little trading of this grain and most people prefer to wait as grain prices in general are very low at domestic markets.

End of March was the traditional start of rice harvest. The rice sector is having a hard time in Uruguay mainly due to high production cost.

Developments

The US dollar rate has gone up slightly as a result of the growing pressure on the US dollar in Argentina. Whereas the US dollar is now 45 pesos in Argentina, the USD went up to 34 pesos in Uruguay.

Citrus producer Caputto in Salto will receive a 3.5 M USD credit from authorities to help finance the harvest in months to come.

Price Livestock