We watch what happens with our neighbors in South America regarding crop production and its effects on our markets. Brazil is the largest soybean producer and exporter in the world, and Argentina is one of our largest corn competitors. Their production capabilities allow them to have a much larger effect on the marketplace and our prices.
However, this year, we are seeing a little bit of a shift in what is happening in Argentina. As mentioned before, they are a perennial competitor with corn. Their last couple of growing seasons have been marred by dry conditions seriously hindering their production. That is partly why we are starting to see the Argentinians ramping up more soybean production.
Joana Colussi is an Argentine native and is an Ag economy researcher. She talks about the growth we are seeing the country make in its soybean production, and it is significant.
Colussi says that besides the drought, corn disease has been the biggest driver of this expansion in soy production.
Remember that when it comes to the soybean industry, Argentina has been primarily known for its crush capacity for soy meal and soy oil. By having them ramp up their own production, they could be changing the dynamic of the industry.
Colussi says that for producers in Argentina, it is a different process to select the best soybean seeds for growing. They do not have rotating growing seasons like their warmer neighbor to the northeast.
This is something that the markets and the U.S. soy industry will be watching closely.
