Argentina's soya plantings seen higher this year: USDA

Soyabean plantings in Argentina's major crop-growing provinces are likely to increase despite falling financial returns for farmers, the US Agriculture Department said on Monday. In a special report, the USDA's Foreign Agricultural Service analysed the profitability of Argentina's soyabean and corn crops in the provinces of Buenos Aires and Santa Fe.
"In the case of soyabeans, one could expect that planted area for this region would increase, despite expected decreasing returns. Soyabean area has been increasing every year for the last nine years, exhibiting no response to the movement of net soya returns," the USDA report said.
The financial returns to farmers were calculated as the price of corn and soyabeans sold on the market times crop yields minus variable production costs, such as seeds, labour, fertilisers, and harvesting expenses.
During the past decade, corn plantings in the region have ranged from 500,000 to 1 million hectares. Corn production was 3 million to 6 million tonnes, with an average yield of 6.6 tonnes per hectare, the USDA said.
Meanwhile, annual soyabean plantings in the area were typically 2 million to 3 million hectares. Soybean production was 3 million to 10 million tonnes, with an average yield of 2.8 tonnes per hectare, less than half of what corn yields in this area, the USDA said. Other factors that influence farmers' planting decisions in the two provinces include crop rotation and weather.
"Net returns for corn and soyabeans are expected to decrease in 2005, due to lower prices and higher costs of production, more so for corn than for soyabeans, as corn prices are much lower than in 2004," the USDA said.
Corn revenues historically tend to be greater than soyabean revenues due to higher yields. But in 2005, corn revenues will be as low as soyabean revenues because of much lower prices, the USDA said.
In the 2004/05 marketing year, Argentina is forecast to harvest 19.5 million tonnes of corn, up from 15 million tonnes the year before, according to previous USDA forecasts.
The country's soyabean harvest is forecast at 39 million tonnes in 2004/05, up from 33 million tonnes in 2003/04.
The USDA will issue its first Argentina corn and soyabean crop forecasts for the 2005/06 marketing year next month.