MercoPress. South Atlantic News Agency

Argentine farmers still trust Milei and are hopeful of his electoral promises

The Rosario Board of Trade indicates that the grain harvest could yield 131.1 million tons, a sharp rise from the 82.2 million tons from the previous year.

Following Argentina's two-year worst drought in a century with agriculture production and exports plummeting, causing a shortfall of at least US$ 20 billion in foreign currency revenue, the country's industry is expecting an excellent harvest in 2024/25.

The latest estimate from the Rosario Board of Trade indicates that the grain harvest could yield 131.1 million tons, a sharp rise from the 82.2 million tons from the previous year.

And even when Argentine farmers largely gave their votes to ultra liberal President Javier Milei in the November election, they now want him to deliver on promises to slash taxes and ease exchange rate controls. In the meantime the bumper harvest “remains put”.

“Silos are full, and we sell just enough to cover expenses,” farmers admit sitting on the success of harvested corn and wheat fields. Those who can wait before selling, are doing so.”

However farmers also complain that lower global prices for cereals and oil seeds and the delay in freeing up the exchange rate, and eliminating export tax tariffs, at which producers can sell their goods abroad, have complicated the good news.

Agriculture is a major part of Argentina’s economy, accounting for 55% of the country’s exports. It is among the world’s largest food producers, ranking third in soybeans behind only Brazil and the United States. Similarly it is a leading exporter of corn and sunflower.

Argentina usually sells about 70% of its agro-industrial production, while the rest goes into storage. Agricultural exports have been estimated at some US$ 30 billion this year, falling short of the average US$ 35/40 billion annually over the past five years.

This has meant that the combination of increased production and unfavorable economic conditions has left Argentina’s fields dotted with “silo bags” — basically, tons of harvested soybeans and grains wrapped in plastic.

The Rosario Board of Trade estimates that there are some 35.6 million tons of unsold grains in the country, valued at almost US$10.6 billion.

Likewise despite president Javier Milei’s campaign promises, he raised duties on exports of soybean meal and oil from 31% to 33% percent upon taking office. With negative reserves in the Central Bank, Milei's team was forced to increase duties and taxes on fuell.

Argentina has half a dozen dollar exchange rates. Exporters get a preferential rate, but still far less than the value of the peso on the parallel informal market (1,300 pesos to the dollar) — which is the average rate producers use to pay for farming supplies.

But despite all the uncertainty, the future still seems brighter. Cristian Russo, head of estimates at the Rosario Board of Trade, said strong rains had boosted projections for the wheat harvest, with a 40% higher yield expected next season.

Not only that, Argentine farmers and the very rich pampa farmlands are (victims) used to uncertainties and surprises, and ”nobody is going to leave a field fallow because they are waiting for another government. You work and plant, and get the most out of it.”