News in brief:
– Recent rains in Argentina bring relief to soybean and corn crops, easing concerns following weeks of heat, according to the Rosario Grain Exchange.
– Mexico plans to import 14-16 MMT of yellow corn due to severe drought in Chihuahua, highlighting the country’s dependence on U.S. imports for addressing the production deficit.
In a significant turn of events, plentiful rains sweeping across Argentina’s primary agricultural regions over the Carnival holiday weekend have brought a sigh of relief to soybean and corn crops, according to the Rosario Grain Exchange. The recent heatwave had sparked growing concerns, making these rains a timely boon. Now, all eyes are on how the crops will respond to this much-needed moisture.
Mexico’s corn dilemma: imports soar amid production deficit
Agriculture Minister Victor Villalobos announced Mexico’s plans to import between 14 million metric tonnes (MMT) and 16 MMT of yellow corn in 2023-24. The severe drought in northern Chihuahua last year significantly impacted production, prompting the need for external supply. Mexico, traditionally self-sufficient in white corn, heavily relies on imports of yellow corn, primarily from the United States. As of February 1, Mexico’s commitments for U.S. corn reached a record 15.8 MMT, underlining the scale of the shortfall and the urgency of addressing the deficit.
SovEcon upgrades russian wheat outlook amid favorable conditions
SovEcon, a Black Sea consulting firm, has revised its forecast for Russia’s 2024 wheat production upwards by 1.4 MMT to 93.6 MMT due to favorable weather conditions. The winter wheat crop is estimated at 67.7 MMT, showcasing a 4.9 MMT increase from the previous year. However, challenges loom as Russia grapples with insufficient grain receiving and shipping capacities, highlighting a need for modern infrastructure.
Resilient farmland values in central US despite headwinds
The Federal Reserve Bank of Kansas City reports that agricultural real estate values in the Tenth District remained robust in 2023, despite challenges like higher interest rates. Nonirrigated farmland values experienced an average growth of 10%, showcasing resilience even in the face of economic headwinds. Demand for farm loans increased, reflecting ongoing financial strength within the sector.
US contemplates carbon border tax: implications for agriculture
Discussions surrounding a potential carbon border tax in the US are gaining traction, mirroring initiatives in the EU. Lawmakers are exploring mechanisms to ensure fair competition for US producers, with a focus on carbon-intensive imports. The proposed Clean Competition Act and Foreign Pollution Fee aim to address the “carbon loophole” in global trade. US fertiliser producers express support, seeking policy certainty for investments in decarbonisation.
This evolving landscape poses challenges in balancing policy comprehensiveness with administrative feasibility, raising questions about potential impacts on domestic consumers. However, proponents argue that embracing CBAMs could incentivise greener production, positioning US products as sustainable and valuable in global markets.
