“The appreciation of the peso caused costs to exceed revenues, reducing profit margins…”
Carlos A. Pouiller is the founding partner of AZ Group consulting firm. Pouiller is an agronomist, graduated from the University of Buenos Aires.
Carlos A. Pouiller, founding partner of AZ Group
AgriBrasilis – What are the impacts of peso appreciation on Argentine agriculture?
Carlos Pouiller – Argentine farmers receive the official exchange rate, which is government-controlled and increases by 2% per month, below inflation. This has resulted in losses for farmers. Imported inputs are also priced at the official dollar rate, with a tax that made these products more expensive. The strengthened peso has caused costs to exceed revenues, reducing profit margins. Other costs, such as wages, also follow inflation, increasing production costs in dollars and affecting the trade ratio between grains and inputs.
AgriBrasilis – Are farmers capitalized?
Carlos Pouiller – So far, there has been no significant decapitalization, but the trend is negative due to tight margins, with the possibility of negative margins in some areas, especially due to lack of rainfall.
AgriBrasilis – How has the elimination of the Impuesto País affected businesses?
Carlos Pouiller – The elimination of the import tax had a slight positive impact on local prices of some imported inputs, but it occurred when most inputs had already been purchased. Therefore, its positive effects will only be felt starting in the 2025/26 season.
“Corn outperformed soybeans in terms of margins…”
AgriBrasilis – Why did soybeans face so many difficulties in 2024?
Carlos Pouiller – It is believed to be due to limited supply. Farmers withheld stocks because of falling international prices and expectations of a large global harvest. A significant carryover stock is expected at the end of the 2024/25 season, which will be carried into the next cycle.
AgriBrasilis – Corn was the crop with the best performance. What drove this, and what are the expectations for the next season?
Carlos Pouiller – Although prices initially dropped due to high production, corn outperformed soybeans in terms of margins in some regions. However, in areas affected by the corn leafhopper (Dalbulus maidis), margins were the worst. For the next harvest, a reduction in planted area is expected, with a possible yield of 48 million tons due to water shortages and high temperatures. Market prospects remain positive due to strong international demand.
AgriBrasilis – Could La Niña negatively impact the sector again in the coming months?
Carlos Pouiller – Forecasts indicate a short-lived La Niña, with a neutral phase starting in autumn. If it does not persist, weather conditions should return to normal. However, it is important to note that corn and soybean yields are determined earlier, in summer, specifically between January and February.
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