The Argentine economy as a whole is largely supported by the agro-industrial sector, which is the main generator of foreign currency. Grain production in our country reached 143 million tons (MTn) in 42 million hectares (Mha) planted for the 2021/22 campaign, being the second historical value in production and a record in land use for intensive crop farms.

According to MAGYP, more than 2021 Mha were allocated for these purposes in the 22/42 campaign. The three main crops in extension continue to be SOYBEAN 16,1 Mha, CORN 10,7 Mha. and WHEAT 6,7 Mha. Three other crops exceed one million hectares planted: SUNFLOWER 2 Mha., BARLEY 1,6 Mha. and OATS 1,4 Mha and the destination of the land for the production of SORGHUM would be around 950 thousand ha. in the last campaign. 

An increasing proportion of soybean and corn crops are late (2nd season). Adding to this factor, the persistent water shortage (4th consecutive low season), lower yields are observed for soybean and corn crops in recent campaigns.
The area planted with corn is the one that has increased the most in recent years, while the area planted with soybeans, after reaching a peak in the 2016/17 campaign, has been decreasing. However, water shortages and expectations of scarce rainfall until mid-summer, added to a relative increase in production costs, would indicate that the trend may change for the next campaign, with an increase in AS with soybeans and a decrease in AS with corn.

Due to the war in Ukraine and global climate conditions, prices for the main agricultural commodities are at their highest levels ever. However, between export duties, exchange rate differences, port fees and marketing costs, soybean producers lose 68% of the value of their production. For corn and wheat, this percentage is 59%.

The sustainability of the government and the policies adopted to get out of the economic crisis that Argentina is going through depends on the inflow of foreign currency generated by exports. Argentine exports were US$78 billion in 2021 (3rd historical value), close to the highest historical value, and this year they are projected to be even higher. The vast majority of them are of agricultural origin and for the 2022/23 campaign a sharp reduction in the volumes produced is expected due to the water shortage that has hit the humid pampas for 4 years now and the strong late frosts that occurred this year.

The availability of foreign currency and domestic political stability depend on maintaining a high international commodity price scenario. If the world scenario were to change, the chances of the domestic economic crisis being resolved without a sudden social upheaval would be drastically reduced. We invite you to read the full report.