Argentine Consumers Gain From Farmers’ Losses

By Mike Danna
Louisiana Farm Bureau Federation Public Relations Director

For some Argentine farmers, it’s the best of times and the worst of times.  Sometimes.

What if you had the capacity to produce high-yielding cattle, wheat, corn and soybeans, but had to wait for the government to give you permission to sell your crops?  That’s kind of the predicament Alejandro Calderon finds himself in.  It seems Argentina, in an effort to keep food prices low to its citizens, mandates that corn and wheat farmers only market their crop as part of the domestic food supply.

Calderon, who has 900 hectares (about 2,000 acres) in production, can’t sell his corn or wheat when commodity market prices are high.  The government sets the price for wheat and corn, and if it’s lower than the world market price, tough.  The farmer takes it on the chin.

So Calderon has to hedge his bets by diversifying his operation, mainly with beef cattle production.  And what a herd of cows he has.

Mostly red and black Angus (primarily red), the animals were the healthiest heifers you’ve ever seen.  They were all uniform, and according to Calderon, they never go hungry.  Grazing on a steady diet of corn silage, alfalfa with a shot of soy protein, his cows eat whenever they want.  And because his soil is good enough to grow a house if you planted a brick, his animals are always in greener pastures, no matter what pastures they might find themselves in.

And since the government doesn’t set the price for beef, Calderon makes up the difference in a very positive way.  Russell Kent commented he’d like to take a few of those animals back to Clinton to punch up his and Amelia’s herd.

While were meeting with Calderon at his equipment shed in Pergamino, it began to rain. It was the first appreciable rain that’s fallen in this part of the Argentina in nearly three months.  (fully 70 percent of all Argentina’s grain production originates in the area).  And as a result of that afternoon rain, prices for corn and soybeans dropped on the Chicago Board of Trade.   How’s that for being at ground zero.  We’re here.  It rains.  Grain prices fall.

Our day began with a tour of the Parana River at Rosario.  The river is the highway along which 80 percent of all Argentine soybeans and corn moves.  There are 25 grain terminals along the river, including facilities owned by Louis Dreyfus and Cargill.   Those 25 facilities load more than 55 million metric tons of grain each year.

Tomorrow we head to an ag equipment manufacturing facility, followed by a visit to a traditional, small family Argentine farm.

Until next time…