Miller Magazine Issue: 145 January 2022

84 Country Profile MILLER / january 2022 The COVID-19 pandemic, on top of Argentina’s two-year economic recession (2018-2019), has compounded the country’s critical economic environment. Argentina’s GDP declined from $445.5 billion (2019) to $383.1 billion in 2020. Argentina has vast natural resources in energy and agri- culture. Within its 2.8 million square kilometers of territory, Argentina is endowed with extraordinary fertile lands, gas and lithium reserves, and has great potential for renewable energy. The country has the second-largest shale gas and fourth-largest shale oil reserves in the world as well as abundant solar and wind energy resources. It is a leading food producer with large-scale agricultur- al and livestock industries. Argentina's main crops include soybeans, indigenous cattle meat, wheat, maize, whole fresh cow milk, grapes, indigenous chicken meat, sunflow- er seed, sugar cane and apples. There has been significant growth in crop production, particularly cereals and oilseeds, over the last 30 years in Argentina. This growth has been driven not only by improvements in productivity for the main crops (i.e. soy- beans, maize and wheat) but also by an increase in land devoted to cereals. In Argentina, nearly all field crop production and most livestock activity occur in the northeastern third of the coun- try. This is a humid, warm temperate zone with fertile soils. This rich agricultural zone is centered on the fertile Pam- pas—an area of slightly more than 50 million hectares—but extends into Argentina’s northern tier of provinces that share a warmer, semitropical climate with the bordering re- gions of Bolivia, Paraguay, Brazil, and Uruguay. Argentina is a large net exporter of agricultural products such as soybean, wheat, corn, sunflower, sorghum, rice, beef and milk. Despite public policies hampering the sec- tor for many years, agriculture is in general well developed, with high levels of productivity. Agricultural production has grown at an annual rate of 2.8% in the last two decades, driven originally by high world grain prices and by tech- nological innovation as prices have fallen over the past years. Unfavorable public policies, particularly export taxes, are likely to have pushed the private sector to innovate in order to remain competitive and benefit from Argentina’s comparative advantage in international markets. The most important technological development include: improved seeds, no-till farming, increased use of pesticides and crop rotations (soybean and cereals). Innovation in the organization of production has also been rapid and massive. New contract farming schemes have flourished, many farming activities have been outsourced to large service providers, and seeding pools bringing together assets from many farmers have been created. Private sector initiatives and organizations have played a leading role in innovation and increasing productivity. Argentina’s production growth and innovation in the last decades has been very much focused on a single com- modity, soybean. Driven by growing world demand, high prices and policies, this commodity has increased its share in Argentina’s production and export portfolio. Argentina is the world's leading exporter of processed soybeans. As for 2021/22 season, The Buenos Aires exchange expects 44 million tonnes soybean production. RECORD WHEAT PRODUCTION Wheat is also one of the main commodities exported by the South American country. Argentina is the world's sev- enth-largest wheat exporter. Argentina's 2021/22 wheat pro- duction is expected at a record 20.3 million tonnes, the Bue- nos Aires Grains Exchange said, citing better than expected yields as the reason for increasing its previous 19.8 million tonne estimate. And US Department of Agriculture (USDA) wheat production forecast for Argentina is 20 million tonnes. The previous wheat harvest record in grains powerhouse Ar- gentina was 19 million tonnes in the 2018/19 season. USDA projects wheat exports for MY 2021-2022 at 13.5mil- lion tons, including roughly 700-800,000 tons of wheat flour (in its wheat equivalent). This would be the second-highest volume on record. The core of the harvest is normally con- Corn ProductIon, ConsumptIon and Exports In ArgentIna (1000 Tons) 2019/2020 2020/2021 2021/2022 Production 51000 50000 54500 Consumption 13500 1360 14000 Export 36252 3850 40000 Source: USDA Wheat ProductIon, ConsumptIon and Exports In ArgentIna (1000 Tons) 2019/2020 2020/2021 2021/2022 Production 19780 17645 20000 Consumption 6350 6350 6450 Export 12785 11000 13500 Source: USDA Barley ProductIon, ConsumptIon and Exports In ArgentIna (1000 Tons) 2019/2020 2020/2021 2021/2022 Production 3800 4100 4800 Consumption 1600 1520 1550 Export 2421 2500 3500 Source: USDA