Argentine Drought Decimates Wheat Crop And Cattle Herds

With a crop of 16mmt Argentina was the world’s fifth-largest wheat exporter last season, according to the USDA.

How things have changed in twelve months. The country will this year have the smallest wheat crop since 1989, according to the Buenos Aires Cereals Exchange.

Argentine farmers have now just about finished harvesting wheat, and the results can only be described as very poor indeed.

According to the Exchange this season's crop will now only total 8.7mmt.

A combination of lower plantings due to political tinkerings with export taxes, a season-long drought and a lack of fertiliser application due to high prices have hit wheat farmers badly. The crisis has been compounded by the world economic slowdown, as farmers turn to the government for help, only to find that the cupboard is bare.

The country's most severe drought since 1961, which has also affected agriculture in neighbouring Uruguay, Paraguay and southern Brazil, has also wiped out many of the country's cattle herds.

Argentina of course is also a major beef producer, famous for its range-fed cattle.

The drought has killed an estimated 300,000 head of cattle and caused at least $600 million in farm losses in Santa Fe alone.

"The situation is terminal," said one rancher. "We are in God's hands. Our water reserves are gone."