2023-07-29 21:54:40
The agribusiness consultant and director of Zorraquín y Meneses, Teo Zorraquinspoke before the microphones of Aire de Campo, on Radio Perfil (AM 1190), regarding the economic situation that agriculture is experiencing in the face of the “corn dollar.”
“You have to think that, with isolated measures, with a devaluation that is not labeled devaluation, which is what has just happened for the fifth time, with a delay in the exchange rate for many things, with a tax on the importation that makes inputs more expensive, that are already closed at a price, that everything will be at cost, today what you have to have are antibodies to know that they are going to change your ball once more. And that today it benefits you because he caught you with corn and you have a higher price, we all know that it is not a benefit. It is a flash at the cost of killing other activities”.
He added that agricultural producers can only appeal to resilience and wait for a change in political conditions following the next presidential elections and specified: “Everything that might be rented was rented, the technology that can be applied is going to be applied, following the worst agricultural campaign in years and financially we are piloting it. I hope the weather is good, because it’s the only side where we have any positive expectations”.
For Zorraquín “you have to shuffle and give once more. If this were a company, there are three or four things that must be done: stop spending more than it earns, rebuild reserves and trust, change the manager and think that this is a long process of rebuilding”.
If it’s legal, selling is fine
Regarding the opportunity that the “corn dollar” gives producers who still have cereal to sell and make a difference, as was eloquently stated in the first week of this new covert devaluation, he was categorical. “If it is legal to sell, it is what you have to do. Those of us who manage companies have a responsibility that is to keep them alive within the framework of the law. Selling within that framework is fine,” he emphasized.
But he also clarified: “Yes, we must be clear regarding the long-term message. Let’s not think that this saves us. This is like a birthday present for some and bad news for others. And in some cases it is the same person, because someone who produces corn and also has a feedlot, is happy in the morning and not in the followingnoon”.
In this sense, Zorraquín explained that “the rival is not intrachain. The rival is the general framework that Argentina has. Whether you are in the agricultural sector, in the industrial sector or have a kiosk, the rival is the change in the rules of the game for private activity. And this situation makes us all a little poorer.”
At the same time, he considered that it is very probable that on August 31, when the validity of the “corn dollar” expires, the commercialization of the cereal -which is now fluid with an attractive exchange rate- will be blocked once more, because the producers will wait for a new period of validity of a differential exchange rate.
The corn dollar will impact the prices of meat, milk and eggs
The stimulus of the box
“Now we sell corn because it is convenient to sell corn and we do not sell soybeans or barley or sunflower. When you are in charge of a company, you move with stimuli. And what conditions you is the box. You can’t say ‘I’m not selling’, if you later have commitments to pay: contractors, fertilizers, taxes, etc. The box is what it is, whether or not it restricts your desire to sell or not sell. But what has been done up to now is to hold on, waiting for the devaluation. And on top of that, the devaluation occurs, and one sees that this government has no way of reaching the end of the year with dollars and that what the Monetary Fund told them is ‘I’ll leave you alone for the STEP’”.
And he added: “The expectation is to remain dollarized with grain, as much as possible, and we wait for the next downpour, seeing the best input-output ratio. Because this corn that the producers are selling, they are not going to use it to go on vacation, but to see if they can buy fertilizers in a market that is closed, or agrochemicals at a better price. Last year’s production fell 50%; Anything that works for you is water in the desert to be able to try to reach the fine harvest, first, and the thick one, later”, Zorraquín graphed.
Regarding the situation of fertilizers, he pointed out that the product is in the country. “What happens is that in the world prices are going down, here they are going up and they haven’t sold for 2 weeks. A monoammonium phosphate, which had dropped to 700-something, today is over 900 dollars. Urea, which had fallen, was around 500 and is currently at 650 dollars. Let’s think that part of that urea is already imported at a defined price and now they charge you a seven and a half percent more (tax) retroactively, if you have not yet closed the operation, having set a price, ”he explained.
For Zorraquín, this increase will be transferred directly to production costs, making all grains more expensive. Fertilizers are the biggest problem because it is the most expensive input and because, once the crop is planted, it is the most relevant to define the potential yield.
Corn dollar at $340: how it impacts meat production
Wheat and barley, intact
Regarding wheat, he pointed out that, although the crop still needs to be finished in some areas, there will still be 300,000 to 400,000 ha less than the area originally planned for the entire country. He specified that “the crops, in general, are doing well, although El Niño has not arrived yet. There were some rains in May, June and April that allowed implantations that were in doubt.
And he added: “The wheat is fine as long as we have the rains in August and September, and we can apply the nitrogenous fertilizers that have not yet been applied. Yield expectation, both in wheat and barley, is intact. There is still a long way to go, but the crops are well established, healthy, and the only thing left to do is add fertility, and that will depend a bit on the weather.”
1690685564
#Economic #political #uncertainty #agricultural #producer #respond