Is the grass a little greener in Argentina?

When I lived in Iowa in 2007 and 2008, working in AgRural’s small branch office in Des Moines, many Americans used to ask me about Argentina. They knew I was from Brazil but, even so, after talking a bit about how the crops were doing in my country, those guys always wanted to know about my South American neighbors. In general, I was not that well informed, especially because at that time I was more focused on U.S. agriculture. And, after all, Brazil and Argentina are very different countries, for better and for worse.

After coming back home, however, I started to pay much more attention to Argentina and its powerful agricultural sector. In 2011, I flew to the capital Buenos Aires for the first time, rented a car and, with the help of some good contacts, spent a few days driving around their main corn and soybean provinces — Buenos Aires, Santa Fe and Cordoba. In some areas, the soil was so rich that farmers didn’t even need to apply fertilizers when growing soybeans after corn.

I immediately thought about central Brazil, my country’s most dynamic agricultural region, where farmers need tons and tons of fertilizers. And, of course, I also thought about the better Argentinean infrastructure, favored by waterways that we don’t have here. The grass on the other side of the fence didn’t only look greener. It really was greener.

But farmers were not very interested in fertilizers, acreage, yields or logistics. All they wanted to talk about was politics. I already knew about the absence of a real free market there, due to the government’s excessive taxation on agricultural exports and, even worse, the export quotas for corn and wheat, which are always changing and prevent farmers from planning their marketing strategies. Seeing the situation through those farmers’ eyes, however, was different and really heartbreaking. After that, I came back to Brazil much fonder of the greenness of my own grass.

But, despite all the difficulties, Argentina has been able to remain among the world’s top grain producers and exporters, thanks especially to soybeans, with an acreage that more than tripled in the last 20 years.

This year, the country seems to have a very good soybean crop. The extreme heat and drought that hit Brazil in January and February didn’t affect Argentina, which is very unusual. The last time Brazil had a crop failure and Argentina was free of damage was in 2004/05. The harvest has just started and there are some losses due to excessive rainfall in some points and lack of moisture in others. But, considering the favorable weather conditions that prevailed in the first quarter of the year, don’t be too surprised if the 2013-14 production exceeds the 54 million tons (1.984 billion bushels) estimated by the USDA.

That’s why South America is still going to produce a huge soybean crop this year, despite the losses in Brazil and Paraguay. For Brazil, where 71% of the area was harvested by Mar 28, AgRural forecasts the production at 85.6 million tons (3.145 billion bushels), compared to an initial potential of 90 million tons (3.307 billion bushels).

Speaking of Brazil (I’m way too Argentinean today!), data just released by the Ministry of Development, Industry and Foreign Trade shows that Brazil exported 6.2 million tons of soybeans in March, a new record for the month. In February, 2.8 million tons were exported, also a record for that month. China has cancelled some shipments (more due to Chinese internal problems than Brazilian infrastructure deficiencies), but those shipments have been switched to other destinations, including the U.S. Corn exports, in turn, totaled only 578 thousand tons, compared to 1.608 million tons in March 2013.

 

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