Jun. 22, 2017
Farmers in Argentina have taken advantage of the reduced export taxes on grain to increase their crop acreage in 2016/17. According to the consulting firm Cominagro, the crop acreage in Argentina during the 2016/17 growing season, including the winter grains that are now being planted, is estimated at 37 million hectares. This represents an increase of 8.9% compared to the average acreage of the last five years.
The increase can be attributed to a change in tax policy initiated by the Macri administration. When President Macri assumed office a year and a half ago, he eliminated the export taxes on corn and wheat and he started the process of reducing the export taxes on soybeans. During the prior administration of President Kirchner, farmers were reducing their crop acreage complaining that they could not make a profit growing crops due to the high export taxes which were in the range of 23% to 35%.
Cominago estimates that during the 2016/17 growing season, soybeans were planted on 52.7% of the crop acreage in Argentina with corn planted on 20.1% and wheat planted on 17.2%. The remainder of the hectares were mainly planted to grain sorghum, sunflowers, and other small grains.
Farmers in Argentina are currently in the process of planting their winter wheat, but persistent wet weather over the last several weeks has delayed the wheat planting in parts of Argentina. The Stock Exchange in Rosario estimates that the wheat acreage in the core production region will decline 10% due to the wet weather that has impacted the region.
In areas of northern Buenos Aires province, where there has been a series of flooding episodes over the last six months, the wheat planting is approximately 30% complete, whereas in areas outside the flooded zone, the wheat planting is approaching 80% complete.
Cominagro estimates that the 2016/17 wheat acreage in Argentina will decline 5.7% to 6 million hectares. The USDA is currently estimating the Argentine wheat acreage at 5.6 million hectares.