Argentina Agribusiness Outlook 2027

The unprecedented currency volatility observed in the second half of 2018 serves as a reminder that Argentina remains an economy in transition, and is therefore vulnerable to setbacks. Despite the current turmoil, Rabobank expects a positive outlook for Argentine agribusiness.

Summary

Looking ahead in the short term, Argentina’s inflation is expected remain high, given the pass-through effects of currency depreciation and rising energy costs. However, in the longer term, with a revised agreement with the IMF and a string of other measures, Argentina aims to bolster confidence and stabilise its economy. The agricultural projections developed in this report assume that this package of measures will enable Argentina to manage its fiscal adjustment and to reduce inflation over the longer term, resulting in the return of positive GDP growth in the coming years. 

In terms of production costs, Argentine farmers have been the most competitive players in the global market. Even with the recent changes in the export taxes policy as a result of the country’s current economic turmoil, Rabobank expects Argentina to continue as a very efficient player and further expansion in soybean acreage will likely take place though the next decade. 

The Argentine crushing sector is also expected to maintain its relevance in global trade. The positioning of Argentina’s industry, close to the producing areas and with easy access to ports, will provide an interesting competitive advantage to the country in order to continue as the main soymeal and soy oil exporter country in the world in the long term. 

For corn, while acreage may be flat, with an important role in the crop rotation system, yield gains are expected to push local production in the coming years, which should be absorbed by increasing demand from the animal protein industry.

Given the landscape of growing production and almost flat domestic demand, Argentina is likely to gradually boost its presence in the international beef market. In fact, the country still counts on its very positive reputation as a high-quality beef producer to support additional growth in beef exports.

For the poultry and pork sectors, the scenario is still challenging. However, it is important to mention that, structurally, Argentina has an important advantage as a leading producer of feedstuff, which in turn is likely translate into opportunities for the sector in the long term.