Global Hot Spots: Argentine elections, Australia heat wave

Global Hot Spots: Argentine elections, Australia heat wave

UK wheat crop gets bigger; Argentine farmers hope for change after election

1. Argentine farmers hope for change after election

Argentina farmers are delaying planting decisions until the October 25 presidential election, hoping for changes in the country's farm policies that include high taxes on soybeans and other crops.

"The three major presidential candidates – Daniel Scioli, Mauricio Macri and Sergio Massa – have signaled possible agricultural policy changes if elected," USDA's attache office said in a recent post. "At present, there is much speculation over how any new administration will direct policies as it takes office in December 2015."

Currently, the government has several policies that impact oilseed production.

UK wheat crop gets bigger; Argentine farmers hope for change after election

"The most significant are: 1) a strong local currency, 2) high taxes and 3) high export taxes on soybeans and products," it said. "Much of the industry expects these policies to be modified after a new administration takes power. Many producers are expected to base their decisions on an expectation that policy modifications will improve returns in time for harvest around March and April."

Currently, export taxes take about a third of famers' crop revenue. On farms far away from ports transportation costs take up to 40% to 45%.

2. Heat wave has Australia cutting grain for hay

A heat wave this month of 90 to 100 degrees temperatures in Australia, largely blamed on El Nino, has some farmers in New South Wales and Victoria on the southeast  side of the continent cutting their cereal crops, such as wheat and barley, for hay, local news services said.

Normally, the crops would be harvested in November, but the heat wave, which followed a dry growing season, hurt yield prospects.

A Reuters survey of analysts, traders and brokers expect Australian wheat production to be down 4% from the latest government estimates because the hot, dry conditions. The poll pegged production at 24.3 million metric tons, up from 23.7 million a year ago, but down from Australia's latest government estimate of 25 million to 28 million and 26 million by USDA.

"To put things in perspective the weather we had over the last weekend in Melbourne was the hottest ever," a Melbourne-based trader said in the Reuters story.

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3. UK wheat crop gets bigger – National Farmers Union

Wheat yields rose by 6% in 2015 taking total production to 16.68 million metric tons (613 million bushels), despite a fall in the area planted, according to the National Farmers Union annual harvest survey.

The 16.68 million tons beats last year's 16.61 million. It also would be the third biggest crop on record, bettered only by 2008's17.23 million and 2000's 16.70 million, according to the UK's Farmers Weekly magazine.

Grain analysis results suggest quality is also generally good, although growers in certain areas did suffer deterioration in quality when harvesting was delayed by the wet weather in August.

Mike Hambly, NFU combinable crops board chairman, said that the record yields appeared to paint an optimistic picture for arable farming, but there were some caveats.

"It is great news to see the nation has had such a successful harvest for wheat. However, in a global context we have seen a sequence of good harvests and grain stocks are currently comfortable," he said in the Farmers Weekly story.

"We've already seen prices taking a 30% tumble over the past two years, similar to our friends in the dairy sector, and costs of production staying put."

TAGS: USDA
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