There was abundant rainfall at the end of June which was good after quite a dry summer and fall. Mid July then was very cold and dry which was good for winter crops such as barley and wheat. The start of August saw high temperatures which may affect the quality in winter crops.
Market Update August 2020
Monthly market update providing objective information about crops, cattle, forestry and other diverse farming business in Uruguay.
Export of beef from Uruguay to European Union is picking up again in July. Both prices and volumes are on the rise. Main destinations are The Netherlands and Germany.
One slaughterhouse was suspended from exports to China for 14 days after one workers was diagnosed with Covid-19. Other staff was tested, but all with negative results.
All in all, the number of animals slaughtered is rising again. 20% up as compared to last month and 10% up as compared to a year ago.
Dairy farmers are having a better year than the previous two years. Gross income in USD is 4.6% higher than a year ago and in Uruguayan peso the gross income is 27% higher. Dairy farming is one of few agricultural sectors in Uruguay with many expenses in peso, such as electricity and labor.
In 2020 imports of beef increased by 45%. This year 25% of all beef is imported from neighboring countries. 83% is from Brazil and 15% from Paraguay. This import is due to the lack of available cattle in Uruguay in combination with exports of living animals from Uruguay to Turkey.
Winter crops that were planted early are doing better than crops planted late June or beginning of July due to heavy rainfall in July. This leads crops farmers to replant part of the seeded area. Also important to look at development of diseases in crops.
Crop prices for soy came down a little bit as a result of good harvest expectations in USA. Prices for wheat and barley went up. The area seeded with wheat and barley is a bit less this year than it was last year. The seeded area of canola is 47% up. Prices for canola are very good, 375 USD per ton. This is due to lower production in Europa and lower yields in Ukraine.
Export of rice was very successful in the first months after harvest in April. Almost 50% of local stock has already been sold and transported. Outlook is very positive for rice farmers who had faced a few difficult years. For next harvesting season the estimation is that there will be less water available. This may be a limitation to the arable area.
US dollar remains relatively strong in Uruguay as compared to other parts of the world. In July the USD decreased less than 2%. At the moment the price is 41.7 pesos in one US dollar.
UPM announced it will construct its third nursery in Uruguay. UPM manages these nurseries for cultivation of seedlings. This new nursery will be constructed near Sarandí del Yi in Durazno. The estimated investment is 25 M USD and there will be employment for 120 persons after the construction is finished. The nursery will produce 10 M seedlings annually of eucalyptus dunnii and grandis.