Lobos: In the vast, fertile pampas outside Buenos Aires, grain silos in the pampas are full of this year’s harvest – but no one is selling yet.
Farmers across the country voted overwhelmingly for President Javier Millais in the November election, but now want him to follow through on promises to cut taxes and ease currency controls.
Until then, the harvest will sit.
“The silos are full. One who sells enough to cover costs,” Ricardo Semino, a farmer from Lobos, 110 km southwest of Buenos Aires, told AFP after the harvest of corn and wheat crops.
“Those who can wait, do.”
After the country’s worst drought in a century, agricultural exports have plummeted, leaving a $20 billion revenue shortfall, with the industry expecting a bumper crop in 2024.
The latest forecast from the Rosario Chamber of Commerce shows that the wheat harvest could yield 131.1 million tons, a significant increase from the 82.2 million tons harvested last year.
But farmers say low global prices and delays in freeing up the exchange rate that producers can use to sell their goods abroad complicate the seemingly good news.
Argentina usually sells about 70 percent of its agro-industrial production, with the rest in storage.
Agricultural exports are estimated at $29.3 billion this year, below the annual average of $32 billion over the past five years.
A combination of increased productivity and poor economic conditions has covered Argentina’s farmland with “silo bags” – basically tons of soybeans harvested and the grains covered with plastic.
Semino said getting the grain into the actual silo was a challenge.
“Usually when you send (wheat) to the silage factory, you are guessing,” he said.
The Rosario Chamber of Commerce estimates that the country has 35.6 million tons of unsold wheat worth about $10.6 billion.
Despite Miley’s campaign promises, the export tax for soybean meal and oil increased from 31 percent to 33 percent. fuel tax has also increased.
Reforms to control currency appreciation are not yet forthcoming and no schedule has been set. Although inflation has declined, it was 276.4 percent in May last year.
Argentina has half a dollar. Exporters receive a premium rate, but below the peso price (1,300 pesos to the dollar) in the parallel informal market—producers pay for agricultural supplies.
Six months into Miley’s tenure, all of this translates into unknown costs for farmers.
“A tractor has gone from $170,000 to $250,000 in the last year,” said Semino.
However, support for Miley continued in the countryside, with Semino explaining that the devaluation of the peso in December helped farmers.
Despite all the uncertainty, the future looks brighter.
Cristian Russo, head of forecasting at the Rosario Chamber of Commerce, said heavy rains have boosted the forecast for the wheat harvest, which is expected to increase by 40 percent next season.
Agriculture does not stop production regardless of what happens in the government, Semino said.
Argentina has surplus harvest, but farmers want more from Milei
