The new Argentina

The new Argentina

Business-friendly government gives farmers hope.

Argentina is a significant player in world agriculture, but Bill Beam believes it will become an even bigger player as policies under the new government will encourage crop diversity, better production practices and upgrades to machinery.

Beam, a corn and soybean farmer near Elverson, Pennsylvania, toured Argentina and southern Brazil in March as part of a United Soybean Board sponsored trip that to view production practices and infrastructures in countries that compete with U.S. soybeans.

Bill Beam in Argentina in front of a ship loading soybean meal.

Argentina already produces a lot of soybeans and is the world leader in soybean meal exports, but inflation and high taxes during the previous administration discouraged modernizing equipment and adopting new production methods, says Beam. That should change with the new government, which has given farmers optimism about their future.

“Argentina will become a bigger powerhouse in agriculture,” says Beam. “It has a lot of potential with its soils and climate if farmers can access the dollars needed to plant and buy the equipment that is needed.”

The changes needed to achieve that potential will take time. The lack of capital has meant farmers there rely on dated field equipment and storage facilities, both of which are in need of upgrades or repairs.

“The combines are relatively modern but do not have the latest technology as those in the U.S. do. Also, everything was well used,” he says.

Crop Rotation

Leading this agriculture renaissance will be the adoption of crop rotation that is practiced in the United States. A USDA attache report in April said a rotation program in Argentina will mean more acres of wheat, corn and sunflower and fewer soybeans in the upcoming crop season.

“The biggest thing was the crops.”  says Beam. “They were not rotating crops like we would. They had a lot of glyphosate-resistant weeds in the soybeans. A corn rotation would help them. Also, if they pushed their corn a little bit they could get a lot more out of it.”

Shortly after Mauricio Macri became President in December he lowered the export tax on soybeans, removed it entirely for grain and removed quotas on grain exports. Those moves should increase exports and encourage farmers to diversify production. The president also announced an infrastructure development program for northern provinces, where much of the country’s crops are grown.

“The farmers we met are planning on one-third each of corn, wheat and soybeans. This will reduce soybeans by maybe 10% as we are thinking most wheat acres will get doubled back to soybeans,” he says.

 Infrastructure

Facilities for moving, processing and exporting the crops appeared to be in better shape than in Brazil, which Beam also visited.

“The road system seems to be more developed until you hit the secondary roads then they are pretty equal with Brazil - rough and filled with large potholes that break equipment. Their ports are closer to production areas, which gives big savings for the farmers,” he says.

Modern soybean processing plants are located at ports and load soymeal onto ocean-going ships directly from the plants. The soybean processing plants are “state-of- the-art facilities.”

“We toured a three-year old soybean plant that crushed 20,000 tons per day. The next day we toured another 20,000-ton a day plant,” he says.

 Acquiring Farmland

Limited banking and credit facilities make it hard to borrow money for land purchases, so a lot of the land purchases are private deals.

One farmer that Beam’s group visited was a hospital administrator who turned to farming.

“I got the impression that unless you had money it was hard to get into agriculture. Land sales were not very transparent,” says Beam.  “We asked them what land would cost to buy and they said it was really difficult to buy it.”

Despite the lack of cash and tight credit, Beam is optimistic Argentina’s farming sector will recover.

“All things considered if the government leaves agriculture and farmers alone, they will increase production by simply rotating crops and buying more fertilizer.”  
TAGS: USDA
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