August 29, 2005

Argentina forecasts record 2005-06 soybean output

Argentina's government has forecast 2005-06 soybean output at a record 40 million tonnes, compared with the US Department of Agriculture's (USDA) forecast at 39 million tonnes.

The country had record harvests in the 2004-05 season, the result of favourable weather and improved seed technology.

However, dry soils during the latest season have hindered wheat seedings and farmers decided to plant soybeans instead of corn, because biotech soybean was cheaper and easier to plant.

Argentina's soybean area was forecast to expand again in 2005-06, rising to about 15 million hectares from 14.4 million hectares in 2004-05.

Soybean production had surged 320 percent in the past 10 years, reaching a record 38.3 million tonnes in 2004-05, since GM seeds were approved in 1996.

On the other hand, Argentina's government forecast 2005-06 corn output at 17 million tonnes, down from 19.5 million tonnes the previous season. The corresponding USDA forecast for Argentine corn was 18.5 million tonnes.

Production costs for corn were higher than that of soy, pushed up by costly seeds and fertilisers. Corn also fetched lower market prices.

Industry feedback indicated farmers should use more corn in crop rotations to replenish vital soil nutrients.

Meanwhile, Argentina's government forecast 2005-06 wheat output at 13 million tonnes, down from 16 million tonnes the previous season. The corresponding USDA forecast was 13.5 million tonnes.