The four-year drought has generated a serious water deficit in the soil profiles. This situation, combined with high temperatures, has caused the largest drop in production in the history of agricultural activity.

Several factors contribute to this situation. Firstly, until the last campaign, the productive frontier had experienced constant growth year after year. Secondly, at present, with the capacity to sow 42 million hectares and the use of existing technologies, Argentina could achieve a production close to 150 million tons of grains. Despite these possibilities, in the last 2022/23 campaign, Argentina only achieved a production of 94 million tons, losing a potential of approximately 60 million tons.

Of the 94 Mtn achieved in the 2022/23 campaign, 41,4 Mtn (44%) corresponded to corn, 25 Mtn (27%) to soybeans, 12,6 Mtn (13%) to wheat and 5 Mtn (5%) to sunflowers. It should be noted that, of the main grains, sunflowers were the only ones that managed to increase their production and maintain yields in the severe drought environment.

Regionally, the most productive areas in the center and south of the province of Santa Fe seem to have suffered more severely from drought conditions, which resulted in yields below national averages. At the global level, a 2023/24 campaign is projected with higher soybean and corn production, as well as lower wheat production. Meanwhile, marketed volumes are expected to remain stable.

Regarding the markets, in the middle of last year commodity prices reached their historical highs, from there a downward trend of approximately 24% for soybeans, 33% for corn and 36% for wheat can be seen taking into account the prices of the first days of November. At the same time, the growing exchange rate gap increases the tax burden on producers. After deducting marketing costs and withholdings, they are obtaining between 67% and 73% less than the price, depending on the grain, in the first week of November 2023.

In relation to the foreign currency generated from their marketing, foreign sales of the oilseed and cereal complexes for 2022 reached a record value of 44 billion dollars. However, during the first half of 1, the same exports have been well below what was sold in the first half of 2023, -1% and -2022% respectively. This represents an amount of approximately 34 billion dollars less in foreign currency income in the first half of the year, and a similar decrease is expected in this second half.