MercoPress. South Atlantic News Agency

Drought forces Argentine farmers to move to soybean

The Argentina's Agriculture Secretariat announced that it expects a record 18 million hectares of soybean for the coming 2008/09 soybean area, up from 16.6 million hectares a year ago.

"The soy area is expected to expand onto land that wasn't used for wheat due to the weather problems and also because of a reasonable expectation on profits" according to the monthly report which predicts the 8.4% year-on-year increase. Last month the Argentine government predicted a soy area of between 17.8 million and 18.2 million hectares, but it is yet to predict output. The US Department of Agriculture, or USDA, sees Argentine growers harvesting gathering 50.5 million tonnes of 2008/09 beans. Argentina is the world' number three soybean exporter and the top supplier of soy-oil and meal and has been dedicating more and more land to the oilseed in recent years. A prolonged drought, which battered wheat crops, and soaring fertilizer prices, which have hiked corn-growing costs have further increased the appeal of soybeans this season. Argentina is also a leading wheat exporter, but a devastating drought forced farmers to abandon 2008/09 wheat and crop yields have been hard hit. Agriculture Secretariat revised its forecast for 2008/09 wheat production to 10.1 million ton, compared with October's estimate of between 9.5 million and 11 million ton. Argentina produced an estimated 16.3 million tons in the 2007/08 campaign. "Frosts and the reduced use of fertilizers had also affected some wheat yields", warns the report adding that production might fall even further if weather conditions are unfavourable in the run-up to harvesting, which is happening in some areas The outlook for the 2008/09 corn area was also reduced from 3.34 million hectares from last month's forecast for 3.4 million hectares. Parched soils have also caused problems for farmers planting corn, but high production costs coupled with slumping global prices are largely to blame for the smaller area, industry analysts say. With regard to 2008/09 sunflowers, the government cut its estimate for the sowing area to 2.2 million hectares from 2.5 million hectares a month ago. The latest estimate would mean a 16% drop in the oilseed area.