Argentina is one of the most important grain and oilseed producing countries in the world, playing a huge role in supplying the market at a time that bridges the gap between Northern Hemisphere harvests. It does it against a background of political uncertainty, especially about currency, which often affects grower and exporter behavior in ways that might not appear justified by global market conditions.

The International Grains Council (IGC) projects Argentina’s 2015-16 total grains production at 49.2 million tonnes, down from 51.1 million in 2014-15.

It put the wheat crop at 12.5 million, compared to 13.9 million the year before. The maize crop is put at 28 million tonnes in 2015-16, compared to 30 million the prior year. The barley crop is put at 3.7 million tonnes, up from 2.9 million.

Sorghum production is projected at 4.5 million tonnes, up from 3.8 million and oat production is forecast to fall to 400,000 from 500,000 tonnes.

Argentina’s total grains exports in 2015-16 are projected at 29.6 million tonnes, up from 26.3 million in 2014-15. Wheat exports are projected at 7.5 million tonnes in 2015-16 up from 4.8 million. Maize exports are forecast at 17.5 million tonnes, down from 18 million.

Barley exports are expected to rise to 2.8 million tonnes (2 million feed and 800,000 malting) from 2 million (1.4 feed, 600,000 malting) the year before.

Sorghum exports are expected to rise to 1.8 million tonnes from 1.5 million.

Argentina is less of a soymeal exporter than it was. “Argentina’s exports reached a peak of 13.6 million tonnes in 2010-11 (April/March), but have been markedly lower in the period since, averaging about 8 million tonnes annually from 2011-12 to 2014-15 on competition from other origins and sluggish farmer selling in more recent years,” the IGC said. “The latter factor may be important in the current MY (ending March 31, 2016), with shipments seen rising moderately, to 8.1 million tonnes (7.5 million). Argentina’s soymeal exports are projected at 27.6 million tonnes, up from 23 million.

“High inflation, an over-valued peso, limited financing and government policies have all combined to force producers to reduce plantings of wheat and corn for the 2015-16 crop year,” the USDA attaché said in a report on the grains sector. “Barley and sorghum, which are not subject to government export restrictions, are expected to increase production. Sorghum has also benefited from an Argentina-China agreement that has opened up Chinese markets for Argentine product.”

“The upcoming presidential election could result in changes in government policies toward grains,” the attaché said. “Planting decisions for summer crops will occur at the same time of the presidential elections (October 2015) and could be influenced by the results of those elections.”


The attaché highlighted problems caused by crop rotations. “In Argentina, the current ratio of planted area between soybeans and corn is roughly six to one,” it said. “Farmers know that this is damaging soil quality, but continue planting soy given the favorable returns compared to corn.”

Argentina is advanced in the adoption of GMO technology, especially for soybeans and corn. “However, in the past couple of seasons the resistance of corn to armyworms has not been as effective as expected, affecting yields and increasing farmers’ costs due to spraying needs,” the attaché said. “If a new government, which takes office in December, quickly moves to eliminate export quotas (ROE) and reduce or completely eliminate export taxes on corn, producers have indicated that they could shift from planting soybeans to increasing late corn acreage for the 2015-16 season.”

The attaché forecasts a slight fall in wheat consumption in 2015-16 to 6.15 million tonnes. “The demand for wheat from local flour mills to supply the domestic demand is quite stable,” it said. “What varies within crops is the use of wheat for animal feed, which normally increases in years in which there are quality problems (such as in 2014-15).”

The report put the number of flour mills in Argentina at over 170, with more than half located in Buenos Aires province and the rest in Cordoba, Santa Fe and Entre Rios provinces. “Under current conditions, flour mills are assured by the government that they will be able to purchase the volume of wheat they need so they do not hurry up to stock product,” it said. “However, many people think that this system will be eliminated with a new administration taking office in December and that the market will return to normal.”

Argentina has started to export dry distiller’s grains to Chile and Uruguay at an average of 10,000 to 15,000 tonnes a month, according to the attaché, which explained that these products pay a 5% export tax while maize exports are taxed at 20%. “In general, the 5 to 6 plants which produce ethanol from grains prefer to sell wet distiller’s grains to nearby customers, but drying the distiller’s grains gives them more flexibility to market their entire volume,” the report said.


The current policies that mostly affect grain production and trade are export tariffs and export quotas for wheat and corn, the attaché said.

“The export quota system known as the Registry of Export Operation, or ROE, was created in 2007 with the original objective of delinking high international prices from local food prices.”

The system is applied primarily on wheat, corn and beef exports. “By limiting exports and announcing export quotas without a given pattern, buyers for the domestic market and exporters do not compete for the product, making farmer prices artificially low,” it said. “Export taxes provide price advantages for local processing industries and the animal feed sector. Current export taxes are 23% for wheat, 20% for corn, 20% for barley and 5%-10% for rice. These policies have reduced both corn and wheat production over the years in favor of soybean production, which is not affected by export quotas.

“The leading presidential candidates have all indicated that the agricultural sector needs to be reformed and have stated that they would eliminate the ROE and reduce or eliminate export taxes on grains, save for soybeans, upon taking office in December 2015. If such a reform would occur, one would expect an increase in corn planted area and in wheat exports for the coming marketing year.”


In an annual report on the oilseeds sector, the attaché looked at why they are popular with producers. “Farmers will continue to look to soybeans for their relatively low production costs, high liquidity, relatively stable international demand, and their function as an alternate store of value in the context of a devaluing currency,” it said. “The ability to store soybeans in silo bags offers producers the possibility of holding onto their soybeans as an alternate store of value. We cannot overstate the importance of this commodity-in-hand wealth for farmers. In an economy that controls foreign reserves and continues to overvalue the peso, land holdings and soybeans have proven perhaps to be the only viable alternatives for holding savings in country.”

More than three quarters of soybeans produced in Argentina are crushed in the country by an industry which has an annual capacity of over 60 million tonnes. Of the soybeans that are exported whole, nearly 80% go to China. “Other important markets for whole beans include Egypt, Bangladesh and Iran,” the attaché said. “Argentina dominates the world market as the largest exporter of soybean oil.”

The largest markets for Argentina’s soybean meal in 2014-15 were the E.U., Vietnam, Indonesia, and Iran.

Key Facts

Capital: Buenos Aires

Population: 43,024,374 (July 2014 est.)

Religions: Nominally Roman Catholic 92% (less than 20% practicing), Protestant 2%, Jewish 2%, other 4%.

Location: Southern South America, bordering the South Atlantic Ocean, between Chile and Uruguay.

Government: Republic. Chief of state and head of government: President Cristina Fernandez De Kirchner (since Dec. 10, 2007).

Economy: Argentina benefits from rich natural resources, a highly literate population, an export-oriented agricultural sector, and a diversified industrial base. Although one of the world's wealthiest countries 100 years ago, Argentina suffered during most of the 20th century from recurring economic crises, persistent fiscal and current account deficits, high inflation, mounting external debt, and capital flight. The economy in 2010 rebounded strongly from the 2009 recession, but has slowed since late 2011 even as the government continued to rely on expansionary fiscal and monetary policies, which have kept inflation in the double digits. The government expanded state intervention in the economy throughout 2012. In May 2012, the Congress approved the nationalization of the oil company YPF from Spain's Repsol. The government expanded formal and informal measures to restrict imports during the year, including a requirement for pre-registration and pre-approval of all imports. In July 2012, the government also further tightened currency controls in an effort to bolster foreign reserves and stem capital flight. During 2013, the government continued with a mix expansionary fiscal and monetary policies and foreign exchange and import controls to limit the drain in Central Bank foreign reserves, which nevertheless dropped $12 billion during the year. GDP grew 3% and inflation remained steady at 25%, according to private estimates. In early 2014, the government embraced some orthodox economic policies. It devalued the peso 20%, substantially tightened monetary and fiscal policies, and took measures to mend ties with the international financial community, including: engaging with the IMF to improve its economic data reporting, reaching a compensation agreement with Repsol for the expropriation of YPF, and presenting a proposal to pay its arrears to the Paris Club. Nevertheless, the government in July 2014 defaulted again on its external debt after it failed to reach an agreement with U.S. holdout creditors. The government’s delay in reaching a settlement and the continuation of interventionist policies are contributing to a prolonged recession.

GDP per capita: $22,100 (2014 est.); inflation: 36.4% (2014 est.); unemployment: 7.7% (2014 est.).

Currency: Argentine pesos (ARS): 8.96 pesos equal 1 U.S. dollar (May 20, 2015).

Exports: $76.47 billion (2014 est.): soybeans and derivatives, petroleum and gas, vehicles, corn, wheat.

Imports: $65.9 billion (2014 est.): machinery, motor vehicles, petroleum and natural gas, organic chemicals, plastics.

Major crops/agricultural products: Sunflower seeds, lemons, soybeans, grapes, corn, tobacco, peanuts, tea, wheat; livestock.

Agriculture: 10.4% of GDP and 5% of the labor force.

Internet: Code: .ar; 11.232 million (2012) hosts and 13.694 million (2009) users.

Source: CIA World Factbook