Argentine farmers, facing ‘serious weed problem’, to lift corn, wheat area

Argentina is next season to extend its recovering “importance” in wheat imports, and take its corn shipments to a record high – as “very serious” weed problems, besides tax reforms, erode the appeal to farmers of sticking with soybeans.

The US Department of Agriculture’s Buenos Aires bureau, in its first estimates for 2017-18, forecast that Argentina will export 10.5m tonnes of wheat, the highest since 2011-12, before tax levies and restrictions imposed by the last government cut the financial appeal of the grain to growers.

“Argentina is recovering its importance as one of the world’s major wheat… exporters,” the bureau said.

The country’s corn shipments next season will hit a record 28.0m tonnes, a rise of 1.5m tonnes year on year.

‘Better business than soybeans’

The gains reflect the impact of reforms introduced by Mauricio Macri since his election as president some 16 months ago, including the elimination of grain export taxes, which at a stroke boosted returns to growers for the likes of corn and wheat.

In 2016-17, following the levy cuts, “corn planted area increased roughly 1.0 million hectares,” largely at the expense of soybeans, which had been preferred by farmers because of weaker export restrictions, although an export tariff on the crop has been maintained.

“After several years of low returns, planting corn in 2016 was very profitable, being a better business than soybeans,” the bureau said.

And it forecast corn area rising by a further 200,000 hectares in 2017-18, to an all-time high of 5.0m hectares.

Wheat area, meanwhile, will hit a nine-year high of 5.2m hectares, up 500,000 hectares year on year, marking “second year in a row in which wheat area increases as result of the policies put in place by President Macri’s administration in mid-December 2015”.

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‘Very serious problem with weeds’

However, the bureau also flagged the agronomic incentives for growers to reduce reliance on soybean sowings, with farmers raising again the priority of crop rotation, typically soybeans followed by wheat or second crop soybeans, with corn then seeded in the third season.

“Most landowners are returning to their normal rotation schemes which many had abandoned during the period of market intervention in search of the most profitable, and easier to sell, alternatives,” the bureau said in a report.

Besides boosting “soil productivity”, the return to rotation had come in the face of a spread of weeds too encouraged by the stress on soybeans.

“Argentine farmers continue to face a very serious problem with weeds which are showing resistance to glyphosate, the herbicide used extensively during the past two decades.

“During this same period, soybeans were the main crop planted in Argentina, with a small area devoted to corn and sorghum.

“The lack of rotation and the use of the same weed killer year after year now have producers spending more money to control weeds.”

Barley reduction

The bureau added that increases in corn and wheat sowings would come in part at the expense of seedings in barley, a crop which was also favoured during the previous regime thanks to relatively light export oversight.

Argentine barley area in 2017-18 will drop to 750,000 hectares – half the level at its peak five years before.

With production forecast constrained to an eight-year low of 2.80m tonnes, exports will tumble by nearly 30% year on year to 1.40m tonnes, also the lowest since 2009-10.

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