The queen returns. The soybean planting planned for this year will grow and will be at levels unprecedented in years, since corn, its main competitor for the sown area throughout the country, faces agronomic adversity as a result of the leafhopper, which sharply reduced production. of cereal last season.
Thus, soybeans, which were once the almost absolute queen of summer arable lands, will once again be the most planted starting in the coming weeks, in the midst of a context of low prices, high production costs, payment of rights of export and other financial equations unfavorable to producers.
This particular phenomenon that occurs in Argentine lands is noticed and explained by Ricardo Bergmann, CREA agricultural producer from Monte Buey, in Córdoba, and vice president of the Soybean Chain Association (ACSOJA.
In dialogue with Field BugsBergmann highlights that, despite good expectations for the next campaign, current economic conditions are making the necessary investments to maximize returns difficult.
“Soybeans never stopped being a fundamental crop in Argentina. This year, we see an increase in the planted area, driven by the substitution of corn due to health problems. However, macroeconomics remains a limiting factor,” says Bergmann. Although the weather has shown signs of improving and international demand is encouraging, retentions and high production costs continue to weigh in the balance.
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“Gross margins are tight, and in many situations, the numbers don’t add up. This is aggravated by the context of an El Niño phenomenon that can affect the availability of water in the core region,” he explains. Tax pressure and export duties are, according to him, two of the main obstacles that discourage producers from adopting new technologies and making investments in fertilization and soil improvement.
However, despite these difficulties, the Argentine producer has an idiosyncrasy of continuing to plant despite everything, and soybeans are a witness to this: “Although the outlook is complicated, soybeans are still a viable option. There is a push on the part of producers to replant, not only because of the potential for profitability, but also because soybeans are a crop that has historically proven to be resilient in the face of adversity,” says Bergmann.
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Bergmann also emphasizes the need for a tax recomposition that allows for greater profitability and competitiveness. “Today, an Argentine producer faces a difference of almost 100 dollars per ton compared to his peers in Brazil, which is unsustainable in the long term,” he says. Furthermore, it highlights the importance of having a regulatory framework that protects the intellectual property of seeds, which is essential to promote innovation in the sector.
With factories working at 40% of their capacity, Bergmann emphasizes that all actors in the chain must unite in the search for solutions. “Soybean cultivation has the potential to generate between 70 and 80 million tons. To achieve this, we need oxygen and a policy framework that supports production,” he concludes.
Watch the full interview with Ricardo Bergmann:
– Historically it is said that when a phenomenon like this happens, producers go towards a more defensive approach. Is this what is about to happen in this campaign that is about to begin?
– There are two important aspects. First, corn unfortunately suffered a very important health issue last year. This large loss will lead to a crop replacement, which will largely be taken by soybeans. However, it is a reality that today the economic numbers of the gross margins of soybean cultivation are too tight. In an uncertain climate, basically due to an El Niño phenomenon that is predicting less water in the core zone, the producer is going to have to adjust the numbers a lot. The counterpart is that unfortunately there will not be a large investment in technology, because since the numbers are so tight, the producer will not be encouraged to apply new technologies.
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– Several reports from entities such as the Rosario and Buenos Aires Stock Exchange say that soybeans under some conditions are no longer a business. Is the producer betting on this? Under what conditions?
– The producer cannot go back. It always has the idiosyncrasy of continuing to grow. Every year it invests around 20 billion dollars. Imagine that some investments are 3,000 million, but the producer continues betting. What he will adjust is the numbers and he will bet more or less according to the circumstance at each moment. Soybeans need fertilization; It is taking away more than it puts back into the ground. But in this context, it is impossible. If you add a phosphorus replacement number, you directly lose silver. There are changes and technologies that cannot be implemented because the numbers are so tight.
– What in an ideal world or in an ideal year should change quickly so that the producer bets on soybeans as they should?
– Unfortunately, it is not to contradict, but evidently the pressure of export duties does a lot to the incentive. A Brazilian producer has a difference of almost 100 dollars per ton with respect to the Argentine producer. We must make a recomposition and talk to the current government, which has made a very big paradigm shift. We are betting on this new paradigm, but we need encouragement to be able to produce and incorporate more technologies. There are also debts within the chain, such as the issue of seeds, where local seed producers, which are very important, need intellectual property protection. The entire chain needs a break, which for the producer means profitability and not another burden.
The return of the queen: “Today corn is more expensive to plant and soybeans appear more viable,” acknowledged Carlos Castagnani, the president of CRA.
– What should happen so that the producer can obtain those 70, 80 million tons?
– We need to negotiate with the government and propose that, for the crop to explode, we need oxygen. I always remember that in 2016, with the Cambiemos government, export rights for wheat and corn were removed, and that allowed a significant increase in production. Soybean cultivation needs a similar treatment. We must weed the lot, but politically and economically. If all these variables are adjusted, soybeans can be a fundamental crop with a very important tonnage, benefiting the entire country.
