LETTER FROM ARGENTINA.
Argentina planted 16,.75 million hectares of soybean last year, yielding 48 million tons of soy.
There could be a further 10 million hectares grown at the drop of a hat, as there is an abundance of scrub land and rough grazing that could go under the plough.
Argentina is the worlds third largest producer of soybean, that is all exported and nothing retained for the domestic market.
Wheat and corn, take up a further 6 million hectares, yielding last year 21.5 million tons of corn and 16 million tons of wheat, making Argentina the worlds fourth largest exporter of both commodities.
Foreign investment has been very strong in the last five years, with George Soros farming 225,000 hectares of arable land, Cresud 165,000 hectares, Grops los Grobo 150,000 hectares and EL Taejar 180,000 hectares. Jim McCartney and his Irish consortium are farming 40,000 hectares.
Jim says that in Ireland, he receives 20pc subsidy on his grain, while here in Argentina he pays 35pc off the top, to the government in export tax.
The price of land coupled with the fact you can get two harvests a year, make farming in Argentina far more profitable than Europe. Three days after harvesting corn, you plant the soy direct into the stubble with no need to plough, five months later you are harvesting your soy crop.
You don’t need to buy expensive equipment, as contractors work the country from north to south, following the harvest with combine harvesters, costing $300,000 each.
They will harvest your crop, for around US$20 per hectare maximum, then move on to the next farm, each one harvesting around 10,000 acres per season.
The combination of cheap land and high yields, makes Argentine farming very attractive for foreign investment.
There are 190,000 farmers in Argentina, however only 20,000 of those farmers own 90pc of the arable land in the country.
There is a meter in depth of loam top soil on most of the land, making it perhaps the most fertile land in the world.
Beef production comes from a national herd of 63 million cattle, of which 70pc are Herefords and Aberdeen Angus.
The Indian breeds of Brahman and Nelore cattle, are bred in the northern part of the country, as they can cope with the heat.
This is where the large crops of lemons and grapes are grown, making Argentina the worlds leader in exporting wine and lemons. Honey is also exported and Argentina is the worlds leader in this field using Australian technology.
Argentina exported 4,200 tons of lamb this year from Patagonia, in the south of the country, yet she is best known for the export of Argentine beef.
Only 20pc of the beef produced goes for export, the balance stays on the home market, where every Argentine consumes 69.5kilos of beef per year, even so Argentina is still the worlds third largest beef exporter, after Brazil and Australia.
Farming is commercially driven with no subsidies, where Europe and the USA have no more land left to plough, Argentina can increase production by 40pc with little difficulty.
Very little fertilizer required , as the lack of using the plough leaves the nitrates in the ground, which is environment friendly.
The average field is 100 hectares or one square kilometer, the average yields are soy 2.88 tons per hectare and corn 6.9 tons per hectare on the best land.
Argentina is the farming Jewel in the Crown of Latin America, the new surge in prices for rural commodities, will make the importance of Argentina a vital force on the world farming stage in years to come.
The recent farm dispute was due to the government raising the export tax of soy, from 35pc to 42pc. Despite this high tax farmers are still 60pc better off than in 2007, owing to world high prices for corn and soy.
Cost of living and wages are only 20 pc, of those in the USA or Europe, so everything is relative, a farm worker earns a maximum of US$400 per month.
There has been a drift from beef farming, into arable farming in the last 5 years and perhaps a larger drift from the dairy industry.
The large multi national companies who are presently farming in the Argentine, have opened the eyes of the local farmers.
