Argentine corn production will jump 17%, to the highest level on record next season, US officials said, as farmers enact a long overdue rotation away from soybeans.
Corn export restrictions have long made the grain less profitable to plant than soybeans, leading Argentine farmers to abandon conventional crop rotation, in favour of monocrop bean planting.
And a change in tariff policy has reversed this situation, leading to a rush away from soybean acres, into corn and wheat.
The US Department of Agriculture’s Buenos Aires bureau forecast 2016-17 Argentine corn production at 31.5m tonnes, up from this season’s high of 27.0m tonnes.
Corn plantings are expected to jump by 1m hectares year on year, to 4.2m hectares.
“The new policies in place (the elimination of export limitations and export tax, plus the strong peso devaluation) have improved dramatically the environment and profitability of this key crop,” the bureau said.
Corn exports were seen rising by 3.5m tonnes to 21.5m tonnes.
At the end of last year, Argentina elected a new president, Maricio Macri, on a platform that included a pledge to reform agriculture.
As well as allowing the peso to devalue, a move that is supportive for domestic commodity prices, Mr Macri announced a cut to export taxes.
Tarriffs have been removed for wheat and corn exports, as well as for soymeal and soyoil. But soybean taxes were only trimmed, to 30%, in a bid to encourage domestic processing.
“As a result, the 2016-2017 season is expected to bring greater wheat, corn, and sunflower planting at the expense of soybeans – the dominant crop in Argentina,” the Buenos Aires bureau said.
As well as expectations of higher returns for wheat and corn, the bureau said that “years of monoculture soy plantings will fuel the beginning of a shift towards grains,” next season.
Planting crop after crop of soybeans, rather than rotating between beans and grains, creates agronomic challenges for farmers.
The bureau noted “development of growing resistance by pests and weeds to various controls and products as a result of years of back-to-back soybean crop production”.
This disease resistance has pushed up crop protection spending by $50-100 a hectare, the bureau said.
“Many farmers who in the past several years stopped planting corn due to its negative returns are eager to incorporate corn in their crop rotation scheme again,” the bureau said.
Wheat rises as well
And wheat production was seen rising by 3.0m tonnes to 14.0m tonnes, the highest level in five years.
“This is a result of an expected increase in planted area of a little over 1m hectares, for a total of 4.8m,” the bureau said.
Wheat exports were seen up 500,000 tonnes, at 7.5m tonnes.
(Source – http://www.agrimoney.com/news/argentine-growers-to-switch-from-soy-to-corn-plantings-en-masse–9478.html)