(Bloomberg) -- A La Niña weather pattern that wreaked havoc on Argentina’s farms just two years ago was expected to be kinder this time around. But as the growing season gets under way, a long bout of dry weather is emerging again.
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Growers are struggling with an incipient drought and need rain in the coming weeks to avoid losses to soybean and corn crops. La Niña, which typically brings dryness to Argentina, is suddenly on the lips of farmers across the prime growing belt.
“All I’m reading in the messaging groups are cries for water,” said Francisco Perkins, a grower in Pehuajo. “It could get ugly.”
La Niña is a serious issue in Argentina, the world’s No. 1 provider of processed soy meal and oil. The nation’s soy crop was devastated by a La Niña-fueled drought during the 2022-23 season, slashing the harvest to the smallest since the turn of the century.
“We’re at an inflection point,” said grower Santiago Olano in Intendente Alvear. “Plants’ demand for water is about to seriously ramp up, but there are no reserves in the soil. If significant rains don’t come in the next two weeks, yields will fall.”
The weather pattern is returning this season just as growers grapple with a poor economic backdrop, including low prices and a strong local currency. That’s pushed down their profit margins to lows not seen in a decade, according to a research report by Buenos Aires brokerage house Latin Securities.
Tighter agricultural harvests also may hurt President Javier Milei’s bid for a sustained rebound in the economy.
Plants on the Pampas are already off to a poor start. The soybean crop is harvested in the second quarter and requires rain in January and February to perform well.
“Over spring and the first days of summer, La Niña has begun to make itself felt, producing water deficits across a large part of the farming region,” Eduardo Sierra, a climatologist with the Buenos Aires Grain Exchange, wrote in a Tuesday report.
The forecasts aren’t good. Weather maps published by Sierra predict lower-than-average rainfall through March.
“The expectation is for spotty rains, which would affect crop growth in key areas,” Cecilia Conde, the bourse’s chief estimates analyst, said in a phone message. To be sure, she said, several corners of the Pampas are OK.
The Rosario Board of Trade, which tends to be quicker than its rivals in revising crop figures, is scheduled to publish its monthly estimates report on Wednesday. Its current forecast is for between 53 million and 53.5 million metric tons.