You are Francisca Morales Tapia, manager of Agrícola Coihuelén: 200 hectares of grain maize watered from a canal in Chimbarongo, in Chile's central valley. On Friday 10 July 2026 you present the season's plan to the family board, and the first question is which hybrid to sow for the next two seasons.
The situation
On Monday 6 July the canal association told you it expects to deliver about 85% of normal water this season. Jorge Muñoz, head of irrigation for twenty years, keeps the record: in the last ten seasons the canal reached its full allocation only twice, and in 2021-22 it delivered 45%. That year the traditional maize dried out in full flowering, and Jorge left a mark on the sluice wall, almost at the bottom.
With full water, the long-cycle traditional hybrid yields 13.5 tonnes per hectare. Maize sells for about $250,000 a tonne (Chilean pesos); sowing a hectare costs about $2.2 million, and the farm carries $50 million of fixed costs a season. In a normal year it earns about $185 million. It has $300 million in cash and a credit line for another $300 million, at 12% a season on any negative balance.
Semillas del Maule offers a two-season contract for a short-cycle hybrid that tolerates drought and heat. With full water it yields 12.2 tonnes, and its seed costs $0.10 million more per hectare. With 85% of the water the two hybrids yield almost the same, about 10.5 tonnes; with 45%, the traditional one falls to about 2.4 while the tolerant one holds near 6.8. In a very hot summer the traditional hybrid also loses considerably more than the tolerant one.
Patricio Soto, the accountant, ran the sum you asked for: if a season like 2021-22 came back with all 200 hectares in the traditional hybrid, the farm would lose about $372 million, more than all its cash. Your father, Hernán Morales, who planted the farm's first maize and chairs the board, has a different figure: in the good years, the traditional hybrid paid for the farm. He has already told you he wants to know whether the farm would hold up through four seasons worse than the last ten.