Alarm in Argentina at over-planting of soy
Argentina is planting too much soy and depleting soils that need crop rotation to keep their nutrients, the head of the country's fertilizer industry chamber told Reuters on Friday, raising an alarm in the world's No. 1 soyoil and soymeal exporter.
The oilseed will dominate Argentina's key farm sector again this season followed by corn and wheat, according to fertilizer sales showing growers intend to plant the country's three main crops in proportions similar to the previous year.
Lower quality soils cause lower crop yields and in turn lower farm profits and government revenue. Locked out of the international capital markets since its 2002 sovereign default, the Argentine government depends on agricultural tax revenue to fund President Cristina Fernandez's expansive social programs.
"Argentina is in a critical situation in terms of lack of crop rotation and soil sustainability," said Maria Fernanda Gonzalez Sanjuan, head of the Fertilizar chamber. The group represents 27 companies that produce, import and sell fertilizers in the South American grains powerhouse.
"Growers are planting too much soy because they want to reduce their risks," she added. "Soybeans are more resistant to bad weather and government policies in Argentina also favor soy over corn or wheat, both of which are subject to export limits."
Farmers complain that the limits, which can be raised and lowered through the year, kill competition among buyers and make crop planning impossible.
Thirty-six percent of Argentina's total 2.8 million tonnes in fertilizer sales this year have been for soybeans, equal to the proportion dedicated to the oilseed in the 2012/13 season, according to Fertilizar.
Argentina is the world's No. 3 supplier of soybeans and corn, and a big wheat seller, at a time of hearty global output estimates that are weighing on the price of all three crops.
Rising World Demand
Chicago corn futures are down 34 percent this year. Wheat is down 16 percent and soy 6 percent. Falling global prices have made Argentine farmers ever more keen to cut risk by focusing on weather-resistant soy. Recent dryness in the Pampas farm belt has added to the jitters and pushed some farmers away from corn.
Fertilizar expects Argentine farmers to plant 18.31 million hectares with soybeans in the upcoming 2013/14 season, down 3 percent from 2012/13. Wheat is already planted for Argentina's 2013/14 season. Corn is going into the ground this month and next with soy to follow in November.
The chamber's projections are based on fertilizer sales and a survey of the seeding intentions of about 1,200 growers.