Nov 11, 2009
Large Soybean Producers In Argentina Look To Neighboring Countries To Expand Their Operations
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
The combination of high export taxes, conflicts with the government, and ongoing dry weather, has large soybean producers in Argentina looking toward Brazil, Uruguay, and Paraguay for land to expand their soybean production. Three of the biggest producers in Argentina including MSU, El Tejar, and Los Grobo have all indicated that they are aggressively searching for more land in the neighboring countries to grow soybeans.
The president of El Tejar indicated that they plan to expand their Brazilian operations by 80% and their operations in Uruguay by 15 to 20% while still trying to maintain their base of operations in Argentina. One of the principal problems for all these producers is the 35% export tax on soybeans levied by the government. Large producers and small producers alike have all railed against this tax, but to no avail. President Kirchner insists that the tax is needed to fund vital functions of the government and she shown no signs of backing down.
Los Grobo, the second largest soybean producer in Argentina, currently operates 250,000 hectares and they plan on doubling their land holding within the next three or four years. Brazil is the main focus of their expansion because of the large amount of land available in Brazil. Today 50% of their soybean production is in Argentina, 30% in Uruguay, and 20% in Brazil, but the majority of their expansion plans involves land purchases in Brazil. The company currently produces 2.5 million tons of soybeans and they plan to increase that to 4 million tons by the 2013/14 growing season.
A spokesman for MSU said they will keep their base of operation in Argentina, but they plan to expand their Brazilian operations by 90%, with 15% expansion in Uruguay, and 31% expansion in Paraguay.
In addition to problems with dry weather and high taxes, the amount of suitable land available in Argentina for soybean expansion is limited. Currently, it is estimated that Argentine farmers will plant 19 million hectares of soybeans in 2009-10, but future expansion of soybean production in Argentina may be limited to no more than 3 or 4 million additional hectares. The crop already occupies nearly all the land that is well suited for soybean production. Any land used for additional soybean production would be of inferior quality. Whereas in Brazil, there are at least 20 million hectares of good quality land that could still be put into soybean production.