Argentina’s Farmers Weigh Taxes, Margins in Planting Plans

By Nicolás Misculin

BUENOS AIRES, July 8 (Reuters) – Farmers in Argentina, one of the world’s top grains suppliers, are set to favor corn over soy in the upcoming 2025/26 season, the head of the major SRA agricultural association told Reuters, citing higher export taxes on soy, subdued prices and margins.

The South American country is the world’s top exporter of processed soy oil and meal and the No. 3 for corn, with its production levels having an impact on global prices.

Nicolás Pino, president of the SRA, said in an interview that stronger prices for corn and lower domestic taxes versus soy were key factors for farmers as they planned for the next campaign. Planting for corn and soy starts from September.

“Many producers will opt to plant corn, which has a better price, lower tax burden, and other uses,” said Pino, also a farmer. He said soy output could however still beat this season’s expected 50 million metric tons given a good weather outlook, while corn should beat this season’s 49 million tons.

“There will be a high planting intention,” he said.

The balance would likely tilt toward corn, though, after Argentina ended a temporary tax cut for soy this month, lifting export tariffs to 33% on soybeans and 31% on soymeal and oil from 26% and 24.5% respectively. Corn is taxed at 12%.

Global prices for both soy and corn are also dampened, putting extra focus on tax rates and margins.

“In a scenario where soybeans are worth less worldwide, close to $370, if you add high tax pressure to that loss of value, the numbers are really tight,” said Pino, who added that some farmers who plant soybeans in rented fields — more than 60% of the total — were facing the risk of bankruptcy.

Pino called on Argentina’s business-friendly libertarian President Javier Milei to lower export taxes to boost production – a campaign pledge the government has delayed given weak state finances and the need for farm export dollars.

“To regain competitiveness, tax withholdings have to be zero, straight to zero,” said Pino, saying that the higher taxes than neighboring producers like Brazil had weighed on production for years and left output from the sector “stagnant.”

Argentina’s total grain production is expected to hit some 136 million tons in the ongoing 2024/25 season, according to the major Rosario grains exchange.

“Given the attitudes the national government has been taking, I have no doubt that the path it proposes is to reach that zero. The issue for us farmers is that at times it feels like time is running out,” he added.

(Reporting by Nicolas Misculin; Editing by Adam Jourdan and Chizu Nomiyama)