The survey answers 406 agricultural producers whose gross value of production is equal to or greater than US$200,000. How is trust measured? 100 indicates a neutral point: values above 100 express that positive perceptions outweigh negative ones; values below 100 express negative perceptions higher than positive ones. In the January reading, academics point to an improvement in the Ag Barometer Confidence Index, although it still remains below 100 points. This improvement occurs above all in the Present Conditions Index, “although we must wait until the next surveys to confirm if this improvement is merely circumstantial or if it becomes a trend”, indicate the specialists from the Austral University.
The pessimism has to do with the expectations of production losses in corn and soybeans, according to the Buenos Aires Cereals Exchange and the Rosario Stock Exchange. In this way, 68% of respondents see an unfavorable impact on crops.
Producers who have some kind of financial surplus and/or access to bank loans (official or private) think that it is “a good time” to invest in machinery, considering that these are priced at the official dollar. The gap with the price of the alternative legal dollar is 100%, therefore, it is a way of avoiding holdings in pesos, taking into account the persistence of the inflationary process and the constant loss of value of the Argentine peso. There are still bank loans at negative interest rates in real terms and a rate hike is expected as a result of the agreement with the IMF that requires interest rates to be positive in real terms.
Under this framework, there is the conviction among the producers surveyed that Congress will approve the agreement with the IMF. In addition, a certain calm is being observed in the foreign exchange markets in the last days of February. On the other hand, there is concern in the agricultural sector about possible measures by the National Government to try to control inflation with decisions that could be negative for the sector.
“There is persistent talk of the decoupling between domestic prices and international prices, through increased withholdings, quotas or suspension of exports, creation of trusts and, more recently, the appearance of a bill to create a National Food Company “All these measures have proven to be totally ineffective in controlling inflation in all the countries where they have been applied, including in Argentina. That is why today they constitute a real concern for Argentine agricultural producers,” the report concluded.
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the end results
- 68% consider that climatic damage is irreversible in first class maize, and only 30% that it is partially reversible.
- In premium soybeans, 19% state that the impact of the drought is irreversible and 59% that it would be partially reversible.
- Prospects are better for late-season corn and second-season soybeans. Only 6% of the producers think that the damage is irreversible in both crops, while 50% think that it is totally reversible.
- Meanwhile, given that there is a very important increase in the prices of soybeans and corn, we ask if this compensates the productive losses at the level of economic results. In this sense, half of the producers responded that profitability will still be lower than in the previous cycle. 32% expressed that they will be similar and 18%, between better and much better.
- 60% of the producers think that it is a good time to make investments in machinery, but not in land or cattle ranching.
Source: Ambito
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