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Surging diesel prices and fertilizer costs have hit Australian farmers as they prepare for winter grain and oilseed planting, leading to expectations for reduced wheat acreage. The weather also hasn’t been cooperating, noted Andrew Owen, meteorologist at World Weather Inc., in a Wednesday note.
“With at least another week of dry weather or limited precipitation in store, early-season planting may get off to a sluggish start until rain potentials increase,” he wrote. “Western Australia will still see periods of light rain through the middle of next week, though the greatest amount will occur outside the main production areas. Concern remains in Australia over the developing El Nino event expected later this year since that may cut into winter, spring and summer crop production potentials in some areas.”
At the same time, the warm weather and lack of rain the past week was welcome for producers still harvesting summer coarse grains, oilseeds, cotton and other crops, he said, noting that yield potentials are still expected to be lower than usual due to adverse conditions during the growing season and earlier in the harvest season.
Trucker strike: Argentine truckers have agreed to meet with farmers in coming days in an effort to settle a dispute, Reuters reported. Trucker protests over higher freight rates have caused delays and paralyzed access to the Quequen port. Reuters said protesting truck drivers have been camped along a road leading to the port, preventing grain trucks from passing and disrupting logistics. The Quequen terminal handles 20% of Argentina’s soybean exports.
Talking daily, action soon?: USDA Secretary Brooke Rollins told lawmakers on Wednesday that her department is speaking daily with the White House and other agencies about high fertilizer prices and that the agency would announce action on the issue soon.
“We’ve had daily calls with the White House, with EPA, with DHS, with Commerce and with Treasury, the very top of these organizations for an all-government approach for fertilizer,” Rollins said, according to Brownfield Ag News. Rollins also said she is speaking with the heads of major fertilizer companies.
E15, once again: News reports pointed to renewed optimism around allowing year-round sales of gasoline blends containing 15% ethanol, known as E15. Language that would have allowed year-round E15 was left out of an appropriations bill earlier this year, angering farm groups and the biofuel lobby. A Republican legislative task force charged with coming up with new legislation has yet to deliver.
But Argus reported Tuesday that a group of Republican lawmakers has returned to an earlier idea for reforming biofuel policy that would prevent larger companies from winning exemptions from biofuel blend mandates, but with a new carve-out for refineries at risk of closing, in a bid to overcome refiner opposition. The report said the task force’s latest plan would restrict exemption eligibility to companies with no more than 75,000 b/d of total refining capacity starting in 2028. The report said the proposal could soon be sent to the House Rules Committee, with backers hoping it can be added as an amendment to the farm bill.
Don’t snooze on Paraguay: Brazil, the U.S. and, to some extent, Argentina are seen as the big three when it comes to global soybean production. Together they accountfor around 80% of global production and 88% of global trade, noted economists Andre Vieira Lobo, Joao Arromatte Caregnato, Gary Schnitkey, and Nick Paulson of the University of Illinois and Carl Zulauf of Ohio State University, in a farmdoc paper.
They noted, however, that other South American countries are getting in on the game, boosting soybean production over the 50 years. They highlighted Paraguay, which accounts for less than 3% of global production but has the potential to play a much bigger role.
Among the highlights of the paper, they noted that soybean yields in Paraguay have trended up through time, with recent yields exceeding 45 bushels per acre in good years. Over the past 10 years, average soybean yields have ranged from a high of nearly 47 bushels per acre in 2018 to a low of less than 22 bushels per acre in 2022 under serious drought conditions. Yield potential for the main zafra, or first-planting, crop in Paraguay is similar to that of the US and Brazil in good growing seasons. USDA estimates suggest 2025/26 zafra yields could exceed 56 bushels per acre and a total crop of nearly 445 million bushels (12.1 million metric tons), the paper noted.
Soybean yields have tended to show much more variability than in the U.S. and Brazil. Soybean yields have been at least 10% below trend in 7 of the last 25 years, compared with 4 years in Brazil and just 2 years in the US, the paper noted, while yield losses exceeding 40% below trend occurred in 2022 and 2012, growing seasons impacted by major drought conditions. The average deviation in years with yields below trend is 22% in Paraguay, 6.9% in Brazil, and 4.4% in the US, the paper said. Positive yield deviations have also tended to be larger, averaging 12.4% in Paraguay, 5.4% in Brazil, and 4% in the US.
“Limited opportunities for further acreage expansion suggest Paraguay will remain a relatively small producer with future production increases needing to be driven by continued yield growth,” the paper concluded. “However, soybean production in Paraguay has been associated with high yield variability, resulting in large fluctuations in annual production. This variability, in combination with its dependence on exports means Paraguay can have a noticeable impact on the global soybean market.”