Trying to determine what is going on in the agricultural world continues to be a mad, frustrating experience. Take, for example, Argentinean soybean production, where estimates are all over the board.
Agweb reports about Argentinean soybean production.
(emphasis mine) [my comment]
Climate vs. Crop Size
12/2/2009
Brazil – Too much rain in the South, and too few in North. This situation in retarding planting in these regions, which can undermine our intentions of reaching a record grain crop.
Last crop we had same situation in N and NE, but rains came in time and planting recovered. Yet, climate disappointed in the end, with excessive rains flooding fields just in the harvest period. Some record yield fields was lost.
In the South last year, we lost volume for hardest drought in last 30 years, just like in Argentina. We also had rain storms in south in this period, but not exactly in the major crop zones. This year, southern Brazil is again facing a weather calamity. Many families lost their homes to wind and flooding, and some weather institutes are forecasting a drought for January and February. I believe there will be enough water reserve in the ground in the summer. What really worries me now is the continuous rain and storms that are delaying the planting.
Argentina – In the period of Nov. 20 to 30, we needed about 4” of rain. But it rained less than 1”. The situation, so far, is very hard for almost entire country. (See ths map). For the next 10 days, more than 4” is needed, but forecast doesn’t show it’s going to happen.
This situation made official agencies cut down soybean production to 45-47,5 million tons, because of delay in planting.
Agrimoney reports that US official restates lower guess for Argentine soy.
10:28 UK, 1st December 2009, by Agrimoney.com
US official restates lower guess for Argentine soy
America's farm attaché in Buenos Aires has, noting continued drought in some areas, stuck with his forecast of a 52m-tonne Argentine soybean crop, despite Washington's greater optimism over the harvest.
Dwight Wilder said that he was retaining his forecast that Argentine farmers would plant 18.5m hectares of soybeans for the 2010 harvest.
Although rains in some districts this month had whetted farmers' appetite for soybeans, to cash in on global prices strengthened by Argentina's drought-damaged harvest this year, they had in parts been so heavy that they had hampered sowings, he said.
Meanwhile, soil moisture remained "insufficient" in the important growing province of Cordoba.
'Lingering drought'
"Some contacts indicate that [national] yields will be lower than previously forecast due to the lingering drought in Cordoba," Mr Wilder said in a report, adding that he did not expect yield to surpass 2.8 tonnes per hectare.
The report comes three weeks after the US Department of Agriculture, in its latest global crops report, raised its forecast for Argentina's soybean output by 500,000 tonnes to 53m tonnes citing a shift by farmers to planting soybeans rather than sunflowers.
The upgrade surprised many investors given sparse rainfall in many areas, which has prompted Oil World, the analysis group, to cut its Argentine soybean forecast by 4m tonnes to 48m tonnes.
Mr Wilder said that the switch out of sunflowers, which farmers had shunned because of low prices and dry weather, could yet see soybean acres rise to 18.8m hectares.
More rain needed
The comments follow a report from the Buenos Aires Grains Exchange last week which also highlighted the need for further rains.
"Except for the most fortunate areas, showers [over the last week] were mainly light or moderate," the exchange said.
"Most western areas still need significant rainfall."
Farmers had planted just 5.4% of their crop over the week, taking the total to 49.6% of the 19m hectares that the exchange expects.
Argentine soybeans, 2009-10 (year-on-year change) - attache's view
Plantings: 18.5m hectares (+7.6%)
Production: 52.0m tonnes (+63%)
Exports: 12.0m tonnes (+189%)
Crush: 37.5m tonnes (+89%)
Ending stocks: 3.1m tonnes (+79%)
Source: USDA attache report
Farm Online reports that Argentina has cut its planting estimated.
Soybeans have seen some favourable pricing recently. Continued demand from China is boosting US soybeans as is the reduction in planted area in Argentina. The Government has cut its planting estimated from 18.5 million hectares to 18 million hectares, which is reducing ideas of an excess of soybeans.
Agrimoney reports that Argentine soy 'to beat US guess by 4m tonnes'.
18:52 UK, 15th December 2009, by Agrimoney.com
Argentine soy 'to beat US guess by 4m tonnes'
[This article is an example of bearish propaganda that pollutes the media]
Australian statisticians have raised the bar on estimates for Argentina's soybean harvest to 57.2m tonnes – well above other forecasts – in a report cutting price estimates for both the oilseed and wheat. [These Australian statisticians then predicted pigs will soon develop the ability to fly]
Argentina's soybean crop will beat last year's by 60% thanks to a switch by farmers from growing grains, the Australian Bureau of Agricultural and Resource Economics said.
"This switch has been driven by a longer planting window for soybeans relative to corn during the spring, and higher returns for soybeans," Abare said.
The figure compares with a 53.0m-tonne estimate from the US Department of Agriculture and a 48.0m-tonne forecast from Oil World, the respected German-based analysis group which has warned over the impact of dry weather on the crop. [The 57.2 million tons estimates make the USDA’s numbers look reasonable by comparison, don’t they? That is most probably their intended purpose]
Oil World restated its projection in a report on Tuesday warning that soybean prices were "set to come under considerable pressure" over the next three-to-six months assuming even its forecast for Argentina's crop, and a 63.7m-tonne harvest in Brazil, were realised.
Lower prices
Abare predicted Rotterdam soybean prices would average $375m in 2009-10, an $18-a-tonne cut from its September estimate and down 10.9% on prices the year before.
The weakening estimate reflected "expected record global oilseed production, which will outweigh the effect of a modest increase in world consumption".
My reaction: Below is summary of the numbers for Argentina soybean production.
Record crop in 2007-08: 47.5 million tons
Production in 2008-09: 32.0 million tons
Argentina soybean crop estimates, 2009-10
“official agencies” in Argentina: 45-47.5 million tons
Oil World: 48.0 million tons
USDA Buenos Aires attache: 52.0 million tons
USDA: 53.0 million tons
Insane Australian statisticians: 57.2 million tons
Keep in mind that:
1) Last year's drought led to poor quality soybean seeds and that germination rate has been low, which will negatively affect soybean yields.
2) Argentina is still suffering from drought.
3) Farmers in Argentina, like everywhere, are suffering a lack of credit as a result of the financial crisis.
Conclusion: The wide range of numbers for Argentina soybean production is not normal. It shows that there are unrealistic estimates (on higher end of the scale) being made to try to influence prices.
For now, I am going with Oil World’s number for Argentina soybean crop, 48.0 million tons.
email
Eric,
Your blog is awesome.
I have learned a lot from it. Keep up the good work.
I have a question for you Eric, how long have you been
following agricultural markets in the manner that you have been of late?
The reason I ask is, how do you know that the sort of phenomenon, i.e. inaccurate agricultural reporting, you are reporting on isn't systematic. How do you know that what you think is an alarming development is typical of agricultural reporting from year to year?
Iowa is running a program called Agragate. The five planks in the program all reduce healthy food to consumers and pay farmers to carry it out.
Вы работаете слишком медленно
Ваша бабушка может плугом быстрее, чем
Почему бы тебе не закончить эту бутылку водки, он поможет вам дисков
Вам понравится кража моих вещей
Сотрудник, я считаю, что это деньги для вас
Dasvedanya, tovaritch
Hello Eric,
Now I've a new fear:
Midnight in the food-stamp economy
Foodstamps are paper backed by food, like paper gold. What would happen when there's a oversupply of foodstamps during periods of shortage... (now another grey 'foodswan'...)
Greetz
Y
Edwardo said...
I have a question for you Eric, how long have you been
following agricultural markets in the manner that you have been of late?
Since early February 2009.
How do you know that the sort of phenomenon, i.e. inaccurate agricultural reporting, you are reporting on isn't systematic?
In other words, your question is "how do I know that the situation is differant now than in previous?"
The USDA is saying "biggest crop ever"
Farmers, weather data, and USDA's own disaster declarations are saying "worst harvest ever"
That simply has never happened before. You can look up old news stories, and you will not find a similar situation in the last twenty years.
Sad thing is most people don't understand is most of the food being produced is to feed animals. Cows alone require 90 pounds or more of food a day depending if they are dairy or "meat". Some of that is hay, but corn and soy meal make a large portion of their daily diet. With 1.3 billion head of cattle on the planet food short falls only amplify the problem. And of course that's only one type of live stock.
Most people assume cows live in fields, it's sort of true, but cycling fields only works so long if the population of the herd allows it. With the price of beef being so low most modern farmers are forced to expand herds to break even. But the reality is most cows raised to be profitable are raised in pens feed them as fast as possible. Thereby the cattle are fully dependent on external food sources.
Hog production is pretty much in the same state of affairs. A pig needs a balanced diet which weights in around 8 pounds a day. Estimated world hog population is around 850 million. Again. Between the population of pigs and cows at 2.2 billion requiring about 90 times the amount of food as the 7 billion people that eat them.
It's pretty plain to see the just in time supply side morons are running the USDA, the Canadian Food Administration and the rest of the world food supplies.
Sad really, personally I don't care one way or another. I grow my own food, raise rabbits and trade the rabbits for chickens with another guy down the road. Living in the country has some benefits. The unfortunate thing is if/when some doorknob announces a food shortage the suburbanites will flock to the sticks looking for food. That way we all starve properly after the food is eaten and gone.
eric i appreciate your passion for this topic. however the midwest is awash in corn and soybeans. small pockets were affected(as they always are) with hail in iowa and floods in the delta. this does not reduce the pain for individuals hit by these events but on balance the crops for the big two are huge.the prices i can receive locally for corn and soybeans do not reflect your reality as printed here. they are going down! many well respected analytical firms report the same thing. are they all in bed with the usda in some massive coverup?? and also other world agencies. i like a good conspiracy theory but yours doesnt hold water. ps. i wish i could read what keating said. dasvedanya to all! farmer dabba ,somewhere in iowa
cpl, you may live in the country but that doesnt make you a farmer and your cited feed intake figures for cattle and hogs are a complete fabrication. i know of NO ONE using those amounts. if they were they are already gone.so cpl, if eric is right (and i dont believe he is for the usa) how far are you willing to go for your rabbits when the hordes pour out of the cities? gun turrets on the cages? farmer dabba, somewhere in iowa.
eric, one more thing tonight, the argies got 2 to 4 inches of rain overnight. farmer dabba, somewhere in iowa(usa)
WHy would I do that? If it did come to that personally I'd run for it.
And I'm hardly a farmer, engineer actually, I just like growing my own food.
I do however support as an engineer the larger farms around the area and the businesses in the area. Most of it is diary, there are some beef cattle but they are mainly sold person to person rather than the standard (and infamous) quota system the diary industry uses. And if you want a healthy cow you feed it. Most of the farm systems that are in place are closer to SAP in implementation. Costs, accounting and some degree of farm automation are part of a profitable farm. Farmworks is pretty cool and feed falls under expenses. Weights of the cattle everything is tracked in the package (there are others). 90 pounds is the yard stick. The management software tracks against what the farmer pays in feed raising the cows versus the yard stick so it's measurable.
So far from your argument it doesn't sound like your farm makes much. Might want to look for a systems engineer in your area to help improve your productivity. Right now your argument is if you get 9 women you can make a baby in a month. Useless supply side nonsense.
For corn, last I looked cow corn and peaches and cream are two different factors of consumption. One is for the dumb four legged variety of animal the other is for the two legged variety of dumb animal.
dabba said...
the midwest is awash in corn and soybeans. small pockets were affected(as they always are) with hail in iowa and floods in the delta.
Iowa saw hail damage so severe and widespread it could be seen from space. Look at NASA pictures after each major hail event and you can see the brown stripes accross Iowa where hail + 100 mph wind reduced the landscape to fields of barren earth.
If you really are "somewhere in iowa", you are critically clueless about what is happening in your state.
good work eric
But u estimated bit higher crop
seems to shed more light on mid-West harvest issues in 2009.
eric, if i am critically clueless about the crop situation, then my crop contacts, from colorado to ohio, n dakota to texas are in the same camp. crops were big outside the pockets of hail and flooding. there will be no shortage of corn soybeans and wheat. maybe some boots on the ground in farm country would teach you some things. but its too late for that, you are already in russia. and i believe you will learn quite a bit over there as well. i am no big fan of the usda crop reports but all the major private analytical firms are clustered close to what the usda is saying. is this some industry wide cover up of what you see on the horizon? could there be food shortages in the future? absolutely! but not 2010. thats all im saying. farmer dabba. somewhere in (yes) iowa. ps. to cpl, my apologies i reread your post. my first interpretation was in error. success to all!
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