Lower tax, higher tech help corn displace soya as Argentina's top crop

BUENOS AIRES: Argentine farmers are expected to sow more corn than ever this season while soybean planting falls to a 15-year low as the country's export tax policy and lack of a regulatory framework for genetically modified beans spurs the shift.

Argentina surpassed drought-hit Brazil this season to become the world's second-biggest corn exporter.

With the help of the huge soy-crushing plants that dot the banks of Argentina's Parana River, the country is the top supplier of soymeal livestock feed used to fatten hogs and poultry from Europe to Southeast Asia.

But production of soy, once the unrivaled king of the Pampas farm belt, is lagging in part because of slow progress in enacting a law that seed companies want to ensure farmers pay royalties on soybean genetic technology. Lack of a "seed law" has hurt access to modified soy that can withstand increasing risk of drought.

Argentine farmers are expected by the Rosario grains exchange to sow an all-time high 7.84 million hectares of corn this year while soy falls to 16.40 million hectares, the lowest since 2006, marking the oilseed's 6th straight year of decline.

The 2021/22 corn harvest is expected by the exchange at 55 million tonnes with the soy crop seen at 49 million tonnes.

"Corn has benefited from new technology over the last 10 years that allows us to plant later in the season. We used to be able to plant corn only in September, and then hope for rain around Christmas," said Santiago del Solar, a grower in the bread-basket province of Buenos Aires.

"If it didn't rain in time, it was a big problem. Yields fell. Now we can plant half of our corn in September and the other half in November. This diversifies our risk," he said.

The Buenos Aires Grains Exchange forecasts 2021/22 corn planting at a record 7.1 million hectares.

"Late planting allows corn yields to remain steadier in dry years while soy yields drop sharply," said Esteban Copati, chief analyst at the Buenos Aires exchange.

More corn from Argentina could help to supply the global market at a time of low supply and high prices. The US government cut its outlook for corn production in the world's top producer by 2.7% last week.

The Buenos Aires exchange said in a report on Thursday that the current 2020/21 corn harvest was 98% complete. It kept its crop estimate for the season unchanged at 50.5 million tonnes.