Drought impacts Argentine soya yields and beef forage supplies

IMG_0351

  • Soya and maize yields plummet as result of drought
  • Argentina imports soya bean from USA for the first time in 20 years
  • Special measures introduced to lower minimum slaughter weight of heifers
  • Farmers forced to change feeding and weaning strategies

The main cropping and beef producing areas of Argentina are experiencing the worst drought in decades, leading to a predicted 27% reduction in soya bean yields, whilst beef farmers are also struggling to feed stock.

The impacts of the drought have been felt in the central area of the country which is the main powerhouse for crop and beef production, known as The Pampas.

Emilce Terre, head of the research department at Rosario’s Board of Trade, says the main crop growing region around Rosario is experiencing the worst drought since 1988. However, some farmers believe it to be the driest period in 100 years, with beef producer in some areas of the Pampas reporting a January-March rainfall of 80mm, compared to the usual 250-300mm.

Crop yields plummet

At the start of the drilling season, soya bean output was predicted to be around 55t, however Emilce (below) now estimates this to be below 40mt. “We have already lost 15mt of soya beans in the last 3-4 months,” she told me.

IMG_0785Soya beans are either planted in October-November or December, with both harvested in April-May. Due to a high water table following higher than average rainfall over the last two years – particularly in October-November last year – the drought has largely affected the later planted crop.

Maize yields are also predicted to be down by around 10mt, with this figure likely to increase as the harvest progresses.

Ms Terre believes the shortfall is likely to have a significant impact on Argentina’s economy, considering the fact a large proportion of soya is processed in Argentina and exported as soya bean meal and oil. Exports of maize are also expected to be down.

The country imports soya from The USA

Higher Argentine soya prices as a result of the drought have coincided with the announcement that China plans to place tariffs of 25% on US soybeans in response to Donald Trump placing US penalties on Chinese goods. As a result, last week, soybean prices dropped as much as 5% on The Chicago Board of Trade.

Consequently, Argentina took the unusual and “punctually convenient” step of buying 120,000t of soya beans from The States.

“This is the first time in 20 years that we have imported soya beans from the United States,” explains Ms Terre. “We do import soya beans from Paraguay, Bolivia and from other countries in South America. If we have a production of around 55mt, we may normally import up to 2mt – that would be the most. Because of this drought we are estimating that this year we will import almost twice that volume, but most of it will still come from South America.”

Emergency measures placed on finishing weights

With the drought also affecting forage supply on many beef farms on the Pampas, on 10 April, The Ministry for Agro-Industry also announced emergency measures for slaughter finishing weights. This lowers the legal requirement for the minimum live-weight of finished females from 300kg to 260kg for the next 90 days.

This is due to the fact some weaner animals are arriving to feed lots smaller than the ideal entry weight of around 220kg. If these animals are kept longer than the usual 90 days in order to achieve the standard minimum weight, this will result in them laying down fat, which will reduce meat quality.

Farmers rethink feeding strategies as crops yields drop

The effects of the drought are being seen by many beef farmers on the Pampas.

Vet and farmer, Jeronimo Gau is experiencing, what he believes to be the worst drought in 130 years.

Jeronimo (below) runs a mixed system on two farms totally 1,300ha in General La Madrid. He grows wheat, barley, sunflower, maize and soya and finishes cattle produced from his 700 cow, predominately Aberdeen Angus herd.

The drought has meant crop yields are down 20-30%, whilst he has also been forced to finish all of his cattle on a ‘confinement system’ – a temporary ‘feed lot’ style system.

This slideshow requires JavaScript.

Jeronimo’s business strategy is focused around finishing cattle as cheaply as possible on forage, with around 70-80% of steers usually finished on grass at 15 months old. The rest then go on to a ‘confinement system’ for 2.5-3 months. Here, they receive maize grain and a protein blend including minerals and monensin.

However, this year, a lack of forage has meant all animals have had to be moved onto this ‘confinement system’, with everything finished at 18 months.

Jeronimo believes this will have a marked impact on the bottom line. Based on 2017-18 figures, he says: “Without confinement, the cost of a kilo of meat (live weight) produced is 20 peso (70 pence). The last 60-70kg added in the confinement system costs 38 peso (£1.32) each,” he says. “We will lose money this year.”

“We will lose money this year.” – Jeronimo Gau.

Weaned heifers and steers are usually grazed on “winter greens” which are oats or barley fed at at mid-human calf height. However a lack of rain meant they were drilled later than ideal in March. As a result, yields are not sufficient to support all stock meaning that they can only be grazed by males. The heifers are now either on grass or Sorghum, which would normally be reserved for cows later in the year. Maize yields are also down, which has lead to the decision to graze the crop, rather than harvest it.

IMG_0141

Miguel Pertino (above) produces breeding bulls and females from his 600 cow Aberdeen Angus, La Trinidad herd. Half the usual summer rainfall in Partido de Magdalena, has meant calves have had to be weaned one month earlier than usual.

He adds: “Once they’re weaned, they usually go to pasture, but this year we’ve had to feed them and put cows on pasture to build body condition as they’re not in peak condition,” he explains.

IMG_0222

Martin Vergara of Buen Retiro (above), has also had to start feeding breeding bulls that are approaching sale earlier than usual because of the drought.

Martin usually sells the majority of his bulls in June, however with Argentina’s beef industry in a period of recovery, more producers are looking to serve heifers now, in the country’s Autumn. As a result he was planning on doing a “pre-sale, sale” in April. However concerns that there will be less heifers on the ground as farmers reduce cattle numbers in response to the drought, means this might not be necessary.

Uplift in Brangus genetics follows soya invasion

This slideshow requires JavaScript.

The wet Pampas to the South West of Rosario used to be prime beef country, but when the past government placed huge taxes on exports and made beef unprofitable, much of this area was converted to soya.

As a result, land is now worth up to US$20,000/ha, compared to US$10-15,000 in the drier “wet pampas” to its south.

The Groppo family used to produce Angus genetics for the wet Pampas region, but a reduced market meant they had to change track. They decided to develop Brangus genetics instead. This Angus cross Brahman (Bos Indicus) is ideally suited to the north of the country, where many beef produces were pushed out to following the development of soya.

The Brahman genetics mean that cattle are better suited to the high temperatures of the north (45C) thanks to:

  1. Their skin folds which increase their surface area and make them more able to release heat
  2. Their ‘hump’ which means they have more fat reserves relative to an Angus so are able to cope better with draught
  3. Black or dark skin pigmentation which is more resistant to the sun

Their resistance to ticks is also a huge selling point in the northern region. Ticks cause blood and weight loss. However more significant are the diseases that ticks spread, which can lead to anaemia and death.

Mauricio Groppo now sells 120 Brangus bulls, 150 heifers and 750 embryos a year under the La Saltana brand. He has seen a marked increase in interest in the breed and believes the breed is taking over from the Hereford as second most prevalent in the country after Aberdeen Angus.

Herefords were predominantly found in the better grass growing areas, but as these are now taken up by cropping, the Aberdeen Angus has become more prevalent. Producers believe Angus are better at making the most of the more hostile territories that beef has been pushed out to.

The development of the Brangus is just another example of the resilience of Argentine farmers and the fact they have had to be willing to adapt to challenging conditions created by politicians.

Argentines take surprise lead with technology

IMG_0374

I’m happy to say that my preconception that Argentine farmers would operate low tech, livestock farming systems has been proved wrong – and actually British farmers may be a step behind.

In the last two days I’ve met a commercial beef finisher using satellite mapping to determine grass covers, budget feed and plan rotations. Another uses soil and yield mapping to decide where to plant specific crops in specific parts of the same field in order to get the best response.

It’s all about making the most of the conditions on the Pampas. They’re known as the prime beef growing area of the country with grass here seen as the best in Argentina. Generally, the warm environment and average rainfall of 850mm/year combine to create what the Argentines believe are the ideal, temperate conditions for grass-fed beef. British genetics – in the form of Aberdeen Angus and Hereford – are prevalent here due to their suitability to the climate.

Most of the grass is permanent pasture, with crop rotations on the better ground. Ryegrass is planted in some better ground, but is not common. It’s mostly fescues and native grasses. Compared to the lush pastures of the UK, these look like standing hay – although the region is currently in what some farmers say is the worst drought in 100 years (blog post to follow).

IMG_0262

The typical grass of the Pampas region known for its beef production (above).

Soils vary hugely within relatively short distances, so understanding soil fertility on your farm is a hugely valuable tool, according to beef farmer Roque Cassini.

Roque runs five farms over 10,000ha in the south west of the wet Pampas region. He is the second biggest producer of breeding Aberdeen Angus, Braford and Brangus animals in Argentina (more on that later). I visited his main unit, La Cassina which is across 6,000ha.

Patch farming

The farm’s “hilly” ground, which is 2-3 metres above the rest, is sandy and low in organic matter, making it only capable of growing Lloron grass. However patches of ground in the same field are higher in fertility and able to grow crops like wheat, sorghum, maize, oats, sunflower and barley. In Argentina, oats, barley and wheat are seen as winter greens and grazed by livestock in July. Oats for example are grazed as a forage at about mid-calf height.

IMG_0399

The low organic matter area on the left is only suitable for growing Lloron grass, whilst the patch next to it can grow winter greens for growing cattle.

To determine where to plant which crop, all of the five farms are soil and yield mapped. The farm managers then have yearly meetings to determine which crop should be planted where. It also enables fertilisers to be targeted effectively.

Granted, field areas are pretty large over here. The average at La Cassina is 80ha. However, Roque would happily plant 10ha areas with a different crop, within the same field and graze specific classes of stock on that area. He calls it “patch farming”.

Satellites

Beef farmer, Nicolas Lafontaine is also trying to maximise use of grass on his beef farm where he produces beef for both internal consumption and export to the EU under the Hilton Quota.

He was part of a trial run by Buenos Aires University and ACREA – an independent farm discussion group – looking at the use of satellites to monitor grass covers.

Many of the farmers I’ve visited are part of ACREA. This is divided into regional groups and district groups of about 12 farms each. Farmer members visit each other’s farms and share and compare performance figures.

IMG_0307Nicolas Lafontaine is one of a number of farmers in his discussion group using satellites to monitor grass covers.

Nicolas is now using satellite imagery as a practical, day-to-day tool on his farm to plan rotational grazing. This is based on historical grass growth data from his farm which was collected in the seventies by his father as part of another trial. The programme uses this information, inputted data on current rainfall, and satellite information on how light is reflected off pasture, to predict grass growth and covers. Nicolas can then plan where to graze different classes of livestock depending on grass growth.

Nicolas is also one of a number of beef farmers trying to raise production of permanent pasture by applying fertiliser and over-seeding grasses (all Argentinian farmers operate no-til). After several years of politics which made beef unprofitable, many producers pulled back on investments. However, with the new government making positive moves to support farming, farmers are starting to gain confidence.

Nicolas has conducted trial work to establish the benefits of applying fertiliser to permanent pasture and recorded a 15-20% increase in yields from applying urea and DAP.

Government backing

The government is also backing technological development across all aspects of agriculture. The National Institute for Agricultural Technology (INTA) has a handful of research centres and 54 experimental farms located across the country. Each farm focuses on conducting research which is relevant to farming systems in that region, whether that’s crops, beef, fruit or forestry. Farmers are the key drivers behind which topics are investigated, with most of the research farms run as commercial, money making enterprises.

Disseminating research findings to farmers in practical terms is seen as hugely important, with extension officers communicating findings to farmers and running discussion groups.

All-in-all, it’s pretty impressive how Argentine farmers are embracing technologies to help maximise performance in what can be challenging conditions. Soil mapping and precision farming is only just starting to be talked about by British livestock farmers, whilst – as far as I’m aware – the use of satellites to assess grass covers is only in the trial stages. Perhaps we have a bit of catching up to do!

Big does’t mean beautiful in Argentina – but things are changing

IMG_0118

In the UK, the market doesn’t want finished beef animals that are too large, but in Argentina, it’s almost the complete opposite.

The Argentine consumer typically has an appetite for smaller heifers of under 350kg liveweight. The reason is their belief these animals are more tender. However, with the country developing its export market – which demands larger animals, generally over 450kg- the industry is trying to close the gap between the two market streams and encourage consumers to select meat from bigger carcasses in order to boost production efficiencies.

Changing Argentine culture is a difficult one. You only need to look along the cattle pens at Linears cattle market (below) on the edge of Buenos Aires to see the typical small framed cattle that form the basis of the country’s diet.

IMG_0092

With an annual consumption of 60kg of fresh beef a head (the highest consumption per capita in the world – although I believe there’s some debate on that with Uraguay), the Argentine carnivore likes their meat and they know what they want.

Victor Sisinni (below), auctioneer for Da-ness srl – one of 55 auction houses operating in Linears market, adds: “Argentine consumers are spoilt to eat smaller, younger animals. But there is a concerted effort among farmers and industry institutions to get consumers to eat bigger animals and maybe not produce as many cattle but more kilos of beef.”

IMG_0076

The market handles around 10,000 head a day – although the day I went was after the Easter break so numbers were down to around 4,000. The market is purely for finished beef animals, with stock going direct to slaughter after being purchased. 85% would be for domestic consumption, with the rest for non-EU exports. Argentine beef isn’t hung, so beef from today’s market at Linears, could be on the plates of Buenos Aires consumers tomorrow.

Victor says steers generally average 400kg live weight and heifers 330-340kg. Cattle are split into different classes at sale: 300-350kg – male or female ‘calves’; 350-430kg – small steers or small heifers; and 430kg+ steers and bulls. These are then classified as “good” or “bad”.

On the day (3rd April – see video below), Victor sold 390 cattle, with heifers averaging 37 peso/kg (£1.30) live weight and steers, 35-36 pesos/kg LW (£1.23-£1.27). 6-7 year old Angus cull cows averaged 23 peso/kg (81p/kg).

I met with Adrian Eduardo Bifaretti and Eugenia Ana Brusca from the“Instituto de Promotion de la Carne Vacuna” (The institute for the promotion of Argentine beef consumption). They told me that 70% of fresh beef here is sold through butchers, with very little available pre-packaged.

The Argentinian shopper goes to their local butcher and usually specifically asks for “ternra”, which means a young animal of under 350kg (this could be a heifer or steer).

In order to change shopping habits, the instituto is actively promoting “special steers” (light steers of 380kg live weight) to the Argentinian shopper. This is financed through the industry as part of a levy paid at slaughter. Farmers pay 11 pesos (39p) per head, with abattoirs paying a further 6 peso per head (21p), which goes to the institute.

The adverts for the campaign have predominantly been placed on social media, with various slogans such as; “At your home or outside, always ask for the special steer”. TV chefs have also been encouraged to promote this type of meat, with radio also being used to communicate the message. “La Rural” Show – which sees 1 million visitors come through its gates in Buenos Aires in July – is also a key route of communication to the public.

This year, the aim is to try and develop the campaign to promote the fact that a “heavy’ steer is also as tasty as a heifer.

No doubt it will be a challenge to change engrained shopping habits. However, the fact the Argentine consumer is so open to eating different cuts of beef already (whether its assado (ribs), knuckle or schnitzel for example), must work in the industry’s favour – once the taste test has been passed.