Argentina Export Tax Cuts Could Pressure US Grain Markets
Brownfield
A grains and oil seeds analyst says Argentina’s plan to reduce export taxes could put U.S. ag commodities at a competitive disadvantage.
Marc Rosenbohm with Terrain says the country will gradually reduce its levies on corn and soybeans through 2028. “The Argentina farmer would see a bit higher price domestically, which incentivizes a bit of an area response and that could push down global prices for those products a bit. The primary effect on U.S. producers would be a bit lower prices because of the extra supply.”
He tells Brownfield American farmers should focus on lowering their cost of production to improve their bottom line. “I think that will be continue to be key in 2027, but more importantly 2028 as we see those export tax reductions are expected to be a bit larger in 2028 than in 2027.”
Argentina’s Economy Minister recently said soybean export taxes will be cut from 24 percent to 15 percent by 2028 and export taxes for corn will go from 8.5 percent to 5.5 percent in 2028.
Rosenbohm says this isn’t the first time Argentina has reduced its taxes. “During the 2010s, we saw a pretty big area response because they had cut the corn export tax significantly relative to soybeans. We saw a pretty big jump in corn area, but to be clear on the current proposal, I don’t expect the same level of area response.”
He says it’s unclear if the tax cuts will stay in place beyond 2028, when Argentina holds elections and a change in leadership could shift policy.