How Much Corn Argentina Will Export Is Unclear as the Economy Reels

Argentina’s corn crop, currently about 60% harvested, is projected to be 47 million tonnes, according to the USDA, well above the previous record of 41 million tonnes in 2017. The US agency also forecasts Argentina will export 30.5 million tonnes of corn (the previous record was 26 million tonnes in 2017). But Argentine farmers could disappoint the export markets by keeping a larger share of their crop at home.

Argentine President Mauricio Macri, who faces presidential elections this fall, has implored his country’s farmers not to hoard their crops as a hedge against inflation, so that the government can raise much needed funds.

Argentina is in an economic bind. Inflation is running at 50% and interest rates are up around 70%. A plunge in the value of the peso has put a strain on domestic consumption across the board. The government secured a huge $56 billion financial aid package from the International Monetary Fund. But one of that package’s stipulations was a mandatory imposition of tariffs on agricultural exports. It’s Argentina’s first set of corn export tariffs since 2015. A historic drought last year further beleaguered the farm economy.

Argentina has a relatively narrow window in which to capitalize on its seasonally competitive prices. The US dominates global corn sales from September to February. Argentina takes the baton from March to July. And Brazil picks up as a major supplier from roughly April to August.