BUENOS AIRES, ARGENTINA — Argentina’s grain producers are facing substantial rent increases for the 2021-22 crop year as landlords seek to benefit from higher crop prices, according to a July 12 Global Agricultural Information Network report from the US Department of Agriculture (USDA).

In Argentina’s core growing region, land rentals for row crops are already the highest in the country, the report said, noting that landlords there are seeking increases of 5% to 10%, with larger increases occurring in southern Santa Fe Province and eastern Cordoba Province where yields were highest this year.

“These rent increases, if realized, will likely reduce profitability for farmers and encourage them to plant more corn, which under current price scenarios offers higher expected returns and has proven more drought tolerant,” the USDA said. “Another factor affecting farmer profitability in the coming year will be rising input costs — principally fertilizer — though agri-chemical prices have also risen.”

The USDA has reduced its projected soybean planted area for 2020-21 in Argentina by 100,000 hectares to 17.5 million, still a slight increase from 17.3 million in 2020-21. This, in turn, reduces forecast production in 2021-22 to 51.2 million tonnes, down 800,000 tonnes from the previous estimate but significantly higher than the estimated 44.5 million tonnes in the recently completed marketing year.

A significant increase in soybean exports is forecast for Argentina in 2021-22 at 6.5 million, up from an estimated 5 million this past marketing year.

Argentina perennially ranks third in soybean production and exports behind Brazil and the United States.