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South American soybean planting: Fast start in Brazil, slow start in Argentina

Ziviani/iStock/GettyImagesPlus planting soybeans with tractor
In South America, crop budgets are hard to pencil out right now.

When it’s time to plant, farmers usually have to save their fretting about risk and uncertainty until bedtime. That’s true anywhere, including South America.

Despite the uncertainty represented by this Sunday’s presidential run-off election, Brazilian soybean farmers seem to have bolted rockets onto their planters. Soybean planting jumped ten points in a week, coming, by October 18, to 34% of the total 2018-19 estimated planting area. This time last year, the planting rate stood at just 20%, and the five-year average is 18%, says Agrural, a consultancy. That pace beat the previous speed-planting record of 28% in the ground at this point of the year, set in 2016.

In the top soy state—Mato Grosso—the numbers are even more impressive: They’re 62% done, compared to 34% a week earlier. Last year at this time, the state’s farmers had 18% of their beans in.

Higher export taxes in Argentina

Meanwhile, soybean producers in Argentina are planting under a cloud of uncertainty. They’re used to pacing the floor most nights over the weather and how a big change in the exchange rate affects the bottom line. But this year they’ll include two more out-of-control factors: shorter-than-usual rains and cool temps that have kept planters parked, and the federal government indicating its soy export tax will go up this year.

When you’re trying to plan for a profit, it would be nice to know by just how much that tax will increase.

The budget bill submitted by the administration allows the soy export tax to rise to as much as 33% (from the current 28%) next year, but some legislators have talked about a 35% rate by the time a vote is taken.

A majority coalition in the national congress said 2019 retentions (export taxes) would not be set higher than 30% for beans and 12% for other row crops affected. The budget bill is still working its way through the legislature.

Buenos Aires ag analyst Pablo Adreani says that uncertainty makes it harder for producers to avoid going into the red as they try to calculate production costs and yields, to end up at least slightly in the black.

Even so, the Buenos Aires Cereals Exchange upped its projection of the total Argentine soy planted area to 43.2 million acres, compared to 42.5 million last year.

South American producers are getting the job done during the day—no matter how well they’re sleeping at night.

The opinions of the author are not necessarily those of Farm Futures or Farm Progress.

TAGS: Soybeans
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