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Production
Estimates and Crop Assessment Division |
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Production
Estimates and Crop Assessment Division |
October 20, 2004
USDA's October forecast for Argentine 2004/05 corn production is 15.5 million tons, compared to 12.75 million last year. Increased area in the main growing areas and increased yields contribute to the rise. FAS analysis shows that the increased area will be in the central portion of the country; this corresponds to the higher yielding area. Weather remains a critical factor. Although recent rains alleviated some drought concerns, more rain is needed. Normal weather is assumed for the coming year. Planting has started and should reach 50 percent complete by the end of October.
As Argentine farmers prepare for planting the 2004/05 corn crop, expectations are for a big year. USDA estimates 2004/05 corn production at 15.5 million tons, more than 20 percent higher than higher than last year’s 12.75 million ton crop. Two factors contribute to this increase: planted area intentions are up nearly 20 percent and yields are expected to recover from last year’s unusual weather.
Argentina is one of the world’s leading corn exporters, averaging more than 10 million tons per year over the last five years. Argentina exports most of its corn production. Corn production has varied considerably in Argentina over the last ten years, ranging between 10 and 19 million tons. Production varies due to changes in area as Argentine farmers respond to market prices.
Argentine corn planting begins in September and reaches the halfway point by the end of October. Entré Rios Province, in eastern Argentina along the border with Uruguay, plants the earliest corn. The main corn area—central and southern Cordoba Province, southern Santa Fe Province and northern Buenos Aires Province—plant corn in October and early November. The main corn area accounts for nearly half of the planted area, and more than half of the production. The highest yielding corn is grown here.
USDA estimates 2004/05 corn harvested area at 2.5 million hectares, up 19 percent from last year. Argentine corn area has fluctuated over the last several years, reaching a maximum of 3.4 million hectares in 1996/97 and a low point of 2.1 million hectares last year. Last year’s early spring drought—the worst in several decades—prevented planting and is the reason for the lowest corn area in several years. One of the hardest hit areas was Rio Cuarto delegation, in central Cordoba, which accounts for almost 10 percent of the nation’s production.
Because of the drought, producers in Rio Cuarto planted corn nearly six weeks later than usual and planted less corn than expected. This year, dryness in the western crop areas has producers worried about a repeat of last year’s drought. Pre-planting conditions for the first decade of October show subsurface soil moisture at lower levels than at this point last year. USDA assumes normal weather for this year’s crop and forecasts area slightly higher than 2.45 million hectares reached in 2002/03. Opinions vary about the size of the increase in corn area for Argentina and range between 5 and 20 percent. The actual increase will depend on the weather as farmers begin to plant over the next several months, and what farmers hope to earn from their crop.
Typically it is more expensive to plant corn than soybeans—in 2003 direct costs were more than double; soybean area has dramatically increased in Argentina. Corn yields, however, have also dramatically increased, especially in central Argentina. In areas where farmers believe they can get very good corn yields, corn area has increased and is more profitable than planting either first-crop soybeans or the wheat-second soybean rotation. Corn area is increasing in the eastern areas of the main corn-growing region: namely, the delegations of Marcos Juarez in Cordoba Province; Venardo Tuerto, Casilda, and Canada de Gomez in Santa Fe Province; and in Bragado, Junin, and Pergamino in northern Buenos Aires Province. In this area, also known as the Zona Nucleo, competition for land among different crops is intense and gains in corn area are likely to be offset by decreases in soybean area. Total area has not increased significantly in the last ten years.
For the country as a whole, though, soybean area is forecast to increase by 1.4 percent and the gains in area are expected in western and northern Cordoba Province, southern Buenos Aires Province, and northern Argentina.
Argentine corn yields have seen a tremendous gain over the last several years due to increasing fertilizer usage and better seed varieties. Although the trend for increasing yields is quite strong, precipitation and temperature at key growing periods remain the defining factor. Corn yields have reached a record 6.33 tons per hectare in 2002/03 and a low of 4.11 in 1995/96. USDA estimates corn yields for the 2004/05 season at 6.2 tons per hectare better than last year and above the five-year average of 5.86. Last year’s unusual conditions did not result in a severe decline in yield. Last year, the western crop areas experienced a severe drought prior to planting. This resulted in extremely late planting in the western corn areas. Despite the late planting, yields were not as severely affected due to mild summer conditions and plentiful moisture. This scenario is unlikely to reoccur, although currently it is dry in the same areas. Timely rainfall for these areas will be needed during the months of October and November.
Yield gains for Argentine corn, however, differ regionally. In the main areas of central Argentina corn yields between 6 and 9 tons per hectare, however, in northern Argentine provinces of Chaco, Santiago del Estero, and Salta yields are between 3.5 and 5 tons per hectare. Southern Buenos Aires and La Pampa Provinces also have lower yields, with averages between 5 and 6 tons per hectare.
