Market Update September 2021

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

Climate

July and August have been winter months with normal rainfall and temperatures. Several sunny and dry days with cold nights. Ideal conditions for growth of winter crops and pastures. The start of September had some good rainfall. September and October are the typical spring months in Uruguay with rising temperatures, many sunny hours per day, but also relatively high rainfall. The expectation is that next spring and summer will see the La Niña effect. For Uruguay, that means higher temperatures and less rainfall than normal.

Cattle

Official statistics of the Ministry of Agriculture carried out in July show that there are 12 M cows (12.045.433) and 6 M sheep (6.263.812). A slight increase in the number of cows and slight decrease of sheep, in both cases 1%.

Meat exports from Uruguay have surpassed again the export numbers of Argentina. This is due to government measures in Argentina. Argentina is a much larger country and the absolute export figures should be much higher than in Uruguay. Recently two cases of Mad Cow Disease in Minas Gerais, Brazil were confirmed. This has led to an export stop of Brazilian meat to China. With both neighbors complicated in terms of beef exports, there is an opportunity for the Uruguayan meat industry.

Crop

Winter crops such as canola, wheat and barley are growing very well with normal winter weather in July and August. If September and October will not get too much rainfall, the yields and quality of these crops look very promising.

The grain prices are very attractive (especially canola and wheat), but prices for fertilizers and other crop input products are also very high. These costs have increased between 30% and 50%.

Estimation is that the seeded area in soybeans will grow by 10% to 1.2 M hectares in Uruguay. Partly because more marginal areas in the north and east will be planted again. The same situation as in the previous soy boom in 2012-2014.

Developments

Obstacles in logistics seriously affect global trade. Cargo through terminals and containers is complicated worldwide due to the trade deviations in China and the Suez Canal (among other events). In the Southern Cone, there is another complication, which is the record low level of the River Paraná. It means that exports of grains from Paraguay and Parts of Argentina need to be subdivided which leads to delays and additional expenses. All grains shipped on River Paraná are shipped to terminals in Uruguay, either Nueva Palmira or Montevideo, before moving on to other parts of the world. This shows the privileged location of Uruguay which is not affected by this problem in the river Paraná

Prices Livestock

Prices Grains