Argentina Corn Production in 2022/23 Forecast At 53 Million Tons

The latest USDA Overseas Farm Bureau counsellor's report shows that Argentina's corn production in 2022/23 is expected to be 53 million tons, 2 million tons lower than the USDA forecast, as the counsellor's estimated harvested area of 6.9 million hectares is 100,000 hectares lower than the USDA estimate, and the counsellor's estimated average yield is lower than the USDA forecast. 

There is still a lot of uncertainty about the scale of corn planting in Argentina. Most farmers plan to increase their corn acreage, and many have already purchased most of the needed production materials. But some farmers have decided to plant 80% of their acreage first and then eventually decide what crop to plant on the remaining 20%, depending on the price of corn relative to soybeans, fertilizer costs, soil moisture and government policy. If the weather continues to be dry, some arable land may be switched to soybeans and some to late-maturing corn. If the weather returns to normal, most farmers will likely maintain their original crop rotation plans and plant early-maturing corn in September. 

Since April 2022, Argentine corn prices have fallen by 5% and direct costs have dropped by 3%. But higher international crude oil prices, combined with a shortage of domestic fuel supplies in Argentina, have led to a significant increase in domestic diesel prices, making freight, machinery and harvesting costs significantly higher. 

Agricultural counsellors expect Argentine corn yields to be below trend for the third year in a row, as high temperatures and dry weather associated with La Niña have had a significant impact on agricultural production. In addition, higher fertilizer costs may cause some farmers to reduce fertilizer use. Although nitrogen fertilizer prices have fallen back about 20%, they remain high, as do phosphate fertilizer prices. The drought of the past few years has also affected hybrid seed production, resulting in a shortage of supply of some high-quality hybrid seeds. 

The counsellor expects Argentine corn production in 2021/22 to be 52 million tons, 1 million tons lower than the USDA forecast. The corn harvest is now 75 percent complete, and late corn yields are slightly higher than earlier estimates due to improved weather and less negative impacts from early frosts. 

The counsellor expects Argentina's corn exports to be 38.8 million tons in 2022/23; 2.2 million tons lower than the USDA forecast due to low production estimates and the Argentine government's control of exports to ensure adequate domestic supplies and calm domestic food inflation. 

To date, the Argentine government has issued 5.9 million tons of corn export licenses for 2022/23. In July 2022, the Argentine government set the 2021/22 corn export quota at 36 million tons and has so far issued 32.4 million tons of export licenses. This year's July exports are estimated at 4 million tons, followed by three months of exports will be close to 3 million tons per month.