I was in Argentina last week by Brazil Soybean project, which despite its name has acquired an international character, and I could travel more than 1,500 kilometers and talk to some producers and institutions. What I saw was the suffering of Argentines over a crop full of uncertainty, and what is worse, with indications that some producers leave farming areas due to losses followed by two seasons.
The previous season had significant losses for both soybeans as for corn. In soybean there was a 22.6% drop in production and, in corn, 31.16%. Considering the breakdown of the previous crop and 60% of the areas are leased, were recorded losses between $ 200 to $ 300 per hectare, so Argentine producers are at their limit.
To make matters worse, the country has embittered inflation of 25%, 26% and 29% in the last three years, which directly impacts on production costs, since 40% of the cost of the producer (freight and agricultural operations) are paid in Argentine Pesos . And with the prospect of another year of losses, reaching 50% in provinces to the north, we can say that there are producers who no longer have to continue the activity. Besides inflation, the tax burden is too high, impacting farmers' income by 40% (retentions of 35% on the value of soybeans and 5% in income taxes).
In Brazil the producers know this story very well, so much so that some regions in the past 10 years have lost the same reasons, 50% of producers who kept her activity. In Fields Julius-MT, my county, for example, were 166 producers in 2003 and today we are only 47, and half of these do not reside in the county, and as a result much of the area is absorbed by larger groups.
In the case of Argentina, which until November predicted a record crop, climate saw his greatest enemy, entering December with excess rain and flooding in various regions. As a result of the 19.7 million hectares potential 2.2% were not planted and who planted 6.7% were committed to the flooding, leaving an estimated area of 18 million hectares to be harvested. Prolonged rains caused late planting stay in 28% of regions. In some, the delay was 10 to 36 days depending on the region, which is compromising productivity. Data from research institutes in Argentina show falls around 30 kg per day late or 30 days late planting in loss of 15 sacks.
Not enough to flood areas, then came the drought in some regions experiencing up to 60 days without rain. In Santa Fe, a province that borders south to Buenos Aires, some areas have seen the last rains on December 15, which translates into longer breaks 30% to 40% in productivity. Importantly, 60% of Argentine areas are leased and the lease amount is around 30 bushels of soybeans per hectare, unlike what we have in Brazil where leases have a maximum of 15 bags per hectare.
Due to all these problems crop Argentina before expected 55 million tonnes, not expected to exceed 48 million. Already we can even estimate an average productivity that should not be much above 2.6 tonnes per hectare. Producers make promises and pray for the rains come and the damage is not larger. Until now, the provinces of Tucumán and Santiago were the most affected and should be the ones that most producers will lose ultimately with crop loss of 50%, direct taxes that reach 40% of production and a lease that reaches 60% of costs total inflation of 29%, it becomes impossible to continue production.