World wheat shortage: Can Uruguay help?

Wheat and other grains were selling for record prices, just as Uruguayan farmers were deciding what to plant in May and June.

By Karen A Higgs

Relocating & Investing

Last updated on June 24, 2022

Advertising

Wheat and other grains were selling for record prices, just as Uruguayan farmers were deciding what to plant in May and June (our Southern hemisphere winter). So in 2022, it looks like Uruguay will be dedicating more land to wheat than ever before.

Besides the war between Ukraine and #3 wheat producer Russia, #2 producer India finding themselves with their own wheat problems, has suspended exports. In the northern hemisphere, wheat grown in the US and Western Europe has been negatively affected by heat waves.

Why isn’t South America the solution to the global wheat shortage?

Recently, the news wire AFP asked, why isn’t South America the solution to the global wheat shortage?

Well, it turns out that none of the top grain producers in South America rank in the top ten wheat producers.

Brazil is one of the top four food producers in the world however it doesn’t cover its own wheat needs. With a population of over 200 million, it’s actually the eighth largest importer of wheat (87% of which comes from Argentina).

In Argentina (population 45 million) wheat acreage is actually down as some of the major grain areas suffer drought. Farmers often alternate soy and wheat crops. A lack of water means they prioritise soy which is priced even higher than wheat. The rise in fertiliser prices is also affecting production in Argentina.

Uruguay has a population of 3.5 million. In the last harvest, Uruguay harvested almost one million tons of wheat. Local demand is 400,000 tons.

Explosion in the price of wheat coincided with planting in Uruguay

As farmers decided what to sow, not only was world demand high but planting conditions were ideal. May and June were dry and the lack of rain combined with new advanced seeding techniques, planting time this year was quicker than ever according to experts.

As a consequence, land planted with grains and cereals this winter may cover the biggest area ever—more than 700,000 hectares. (What does a hectare look like? See here)

Actual figures will be in in the next couple of weeks but estimates stand around 250,000 hectares planted with wheat, the same amount of canola and 200,000 for barley.

However Uruguay won’t find itself in a different position to other nations. It’s likely that, despite producing more than double the wheat it consumes, Uruguay will need to import wheat too around October.

According to mills contacted by local paper, El Observador, this is not an unusual practice. It will depend on whether exports continue to capture high prices. Mills will likely import from Argentina based on availability, quality and low delivery costs thanks to close proximity.

Sources: El Observador, Blasina y Asociados, farmlanduruguay.com

Advertising

Latest

Uruguay tours: Casapueblo, Punta Ballena

Uruguay tours – Private city tours of Montevideo, Colonia & Punta del Este

When you want to experience the best of Uruguay’s most emblematic cities—with a guide genuinely excited to personalise the tour just for you.

Montevideo tours – Tango, Football & the Carnival Whisperers

Your private Montevideo cultural tour and gateway to carnival, an authentic tango joint or a soccer match with a great local guide.

Cabaña Verónica – Great steak & Uruguayan asado

The Port Market—Disneyland for carnivores—is not to be missed but avoid tourist traps! At Verónica’s, you’re guaranteed great steak & Uruguayan asado.

Trekking in Uruguay – El Gavilán, Valle del Lunarejo nature reserve

Trekking, horseback riding, nature photography, birding in one of the most outstanding protected areas in Uruguay, Valle del Lunarejo.

Varela Zarranz – Uruguay wine history & sparkling wines

One of Uruguay’s oldest wineries, Varela Zarranz is just 50 min from the capital. Winner of 150+ awards, it’s famous for its sparkling wines.

Índica Beer - Montevideo bar and brewery

Índica Beer – Great little Montevideo bar & brewery

Índica Beer is a friendly welcoming Montevideo bar and brewery making some of the best craft beer—particularly IPAs and German-style lager.

Uruguay Citizenship – It’s been 23 years but I’m finally applying!

It’s been a long time coming, and I’m so excited to finally be starting the process of applying for Uruguay citizenship.

How to get from the Montevideo airport to the city

The Montevideo international airport is 15 miles from the city centre. You can take a taxi, shuttle or bus. The most common way is private transfer.

Bodega Cerro Chapeu – Uruguayan wine legends

Led by a “winemaker legend”, Cerro Chapeu is a must-do Uruguayan wine destination. In the wild middle of nowhere, it is a shock to discover such an exciting, modern winery, say experts.