It’s the worst of times in Argentina’s drought-hit areas

CIGUENA/ROSARIO, (Argentina): In the Argentine town of Ciguena, rancher Andrés Betiger is fighting to keep his farm from going under amid the South American country’s worst drought in sixty years, which has pummeled soy, corn and wheat crops and dented cattle herds.

To get water, Betiger travels 52 kilometers (32 miles) with a tank and rickety tractor that often breaks down, a reflection of how the arid weather since last year has weighed on farmers, who have delay planting and even abandoned crops.

“Things are bad, we don’t have much, we don’t have margins to stop things for four or five days. We are practically hauling water every day for the animals to drink,” said Betiger, 41, who is contemplating to declare bankruptcy.

“It hurts, it scares me,” he added. “It’s already becoming financially and physically unsustainable.” Argentina’s drought has big repercussions for global food markets, forcing farmers to slash harvest outlooks and denting grains supply from the world’s top exporter of soy oil and meal, the No. 3 for corn, and a major wheat and beef supplier.

This in turn hits Argentina’s ability to build up much-needed reserves of dollars, threatening to derail a fragile economic revival and leave the government unable to meet debt repayments amid spiralling inflation and a deep fiscal deficit.

“In Argentina this drought situation has created a perfect storm,” said Cristian Russo, head of agricultural estimates at the Rosario grains exchange, which cut its soybean harvest estimate this month to what would be the lowest in 14 years.

The impact of the drought, linked to a third straight La Nina weather pattern, could still get worse, he added, which could lead to further cuts to the soy and corn outlook. The wheat harvest was already slashed in half by drought.

“There are more reasons to be pessimistic and think that the numbers are going to continue to collapse,” Russo said, adding that in terms of the harvest it was shaping up as the worst in 20 years. “It’s going to be a crisis like we haven’t seen. That implies that many producers are going to go bankrupt.”